Watsco B 2025 Q3 Earnings Net Income Falls 6.2% Amid Revenue Decline

Watsco B (WSO.B) reported fiscal 2025 Q3 earnings on Nov 8, 2025, with revenue and EPS both declining year-over-year. The results missed expectations, and no guidance adjustments were provided.

Revenue

The total revenue of Watsco B decreased by 4.3% to $2.07 billion in 2025 Q3, down from $2.16 billion in 2024 Q3.

Earnings/Net Income

Watsco B's EPS declined 6.1% to $3.98 in 2025 Q3 from $4.24 in 2024 Q3. Meanwhile, the company's net income declined to $189.23 million in 2025 Q3, down 6.2% from $201.65 million reported in 2024 Q3. The earnings reflect a decline in profitability despite robust cash flow of $355 million, indicating operational resilience amid sales challenges.

Price Action

The stock price of Watsco B has edged down 0.00% during the latest trading day, has edged down 0.01% during the most recent full trading week, and has tumbled 9.05% month-to-date.

Post-Earnings Price Action Review

The strategy of buying WSO.B shares when revenue beats and holding for 30 days shows promising potential based on historical data. Following WSO’s earnings beats, the stock exhibits positive momentum, with a tendency to rise in the immediate 30 days post-release, driven by market optimism about the company’s performance and future prospects. Backtests indicate substantial returns from holding WSO.B for 30 days after an earnings beat, as seen in Q3 2025, where record cash flow of $355 million offset a 4% sales decline, signaling liquidity strength. However, risks persist due to the transition to A2L refrigerants, which may impact sales and margins, alongside macroeconomic volatility. Institutional confidence, with significant stakes held by Buck Wealth Strategies LLC and other hedge funds, further supports the stock’s potential. Investors should balance optimism with caution regarding these risks and broader market conditions.

CEO Commentary

Watsco B’s CEO emphasized operational resilience despite the revenue decline, noting the company’s ability to generate $355 million in cash flow during Q3 2025. He highlighted strategic investments in A2L refrigerant transition as a long-term growth driver, albeit with short-term margin pressures. The tone was cautiously optimistic, underscoring confidence in market demand for HVAC solutions and the company’s strong liquidity position.

Guidance

No explicit forward-looking guidance was provided in the earnings report.

Additional News

Within three weeks of Nov 8, 2025, Watsco B announced a $50 million stock repurchase authorization, reflecting confidence in its capital structure. Additionally, the company secured a $200 million credit facility to support its A2L refrigerant transition. No C-level executive changes or M&A activity were reported during this period.