Watsco reports Q3 2026 revenue in line with estimates despite EPS miss

Watsco (NYSE:WSO) reported third-quarter 2026 revenue of $2.22 billion, representing a 7.4% year-on-year increase that met Wall Street expectations. However, the company’s GAAP earnings per share (EPS) of $3.77 fell 8.2% below the consensus analyst estimate of $4.11.

Operating margins declined to 10.1% from 11.4% in the same quarter last year, while free cash flow margin decreased to 14.2% from 16.7%. Despite these misses, Chairman and CEO Albert H. Nahmad noted that results indicate continued improvement in end-market demand, specifically citing a return to growth in residential unit volumes.

The company has expanded its network through the acquisitions of Jackson and Granite, adding 107 locations and $730 million in annualized revenue. Management stated that long-range objectives for sales, margin, and cash flow generation remain intact as demand trends normalize.