Post-earnings recap
Reported
Wed, Jul 29, 2026
EPS actual
$4.00
EPS est.
$4.38
EPS surprise
-8.72%
1-day move
-12.92%
Watsco, Inc. reported earnings that fell short of expectations, with an EPS of $4.00, leading to a significant stock decline of 12.92%. The lack of revenue data and management commentary may contribute to investor uncertainty about the company's future performance.
| Metric | Actual | Expected | Surprise |
|---|---|---|---|
| EPS | $4.00 | N/A | -8.72% |
| Revenue | N/A | N/A | N/A |
No transcript is on record for the earnings call, and the analysis is based solely on numerical results.
Watsco, Inc. is a leading distributor of air conditioning, heating, and refrigeration equipment. Operating in the industrials sector, the company plays a crucial role in the HVAC industry, which is influenced by trends in construction, energy efficiency, and climate control.
Last quarter
In Q1-2026, Watsco reported an EPS of $1.87, surpassing expectations by nearly 8%. However, the stock fell by 4.03% the following day, indicating mixed investor sentiment.
EPS beat streak
0Q
EPS beat rate
25%
Avg EPS surprise
-5.57%
Avg 1-day reaction
-2.89%
Overall, investors are cautious ahead of Watsco's earnings report, given the company's recent mixed performance and lack of guidance.
Bull case
If Watsco can demonstrate strong revenue growth and improved margins, it could signal a recovery in demand and investor confidence.
Bear case
Conversely, if the company reports lower-than-expected earnings or revenue, it may indicate ongoing challenges in the HVAC market.
The print will turn on these.
Q1
What will be the EPS for this quarter?
Given the recent EPS surprises, this figure will be critical in assessing the company's profitability and market confidence.
Q2
How is the company addressing supply chain challenges?
Supply chain issues have affected many industries, and Watsco's response will be key to understanding its operational resilience.
—
Est. EPS
—
Est. Rev
—
Impl. Move
±3.5%
Why consensus could be wrong
The Street may be underestimating Watsco's ability to recover from recent supply chain issues, which could lead to better-than-expected performance this quarter.
Supporting evidence
The company has historically shown resilience in challenging markets, with a 25% EPS beat rate.
Options are pricing a smaller move than historical averages, suggesting potential for a larger reaction.
Recent trends in construction and HVAC demand may not be fully reflected in current estimates.
Key risk
If EPS comes in above $2.00, it could challenge the current bearish sentiment.
Pre-commit to what would confirm each case.
This quarter's performance is pivotal for Watsco, as it needs to demonstrate resilience in a challenging market environment.
Bull confirmed if
An EPS of $2.00 or higher would confirm a strong recovery in profitability.
Bear confirmed if
An EPS below $1.50 would suggest ongoing struggles and could lead to further stock declines.
What the market is pricing for the move.
Implied Move
±2.55%
Historical Avg
±6.3%
The options market is pricing a modest move, suggesting that investors are uncertain about significant changes in the stock's value post-earnings.
Options are pricing ±2.5% while WSO has averaged ±6.3% over the last 8 prints — setup is pricing cheap.
ATM IV
0.4%
30d HV
33.0%
Cross-company pattern from 30 similar setups.
Prior-quarter beat + options pricing cheap in Industrials
Fade rate: 5 of 24 (21%)
This setup has occurred 30 times across Industrials in the last 2 years. 19 of 24 (79%) held or extended their move within 5 days — this setup typically holds direction. The average absolute 1-day move is 4.6%, with a raw directional average of +1.6% (modestly positive historical bias).
Smart-money positioning from the most recent 13F filings.
Institutional
109.90%
of float
Insider
0.38%
of float
Holders
1,060
institutions
Top Holders· as of Jun 2026
Blackrock Inc.
4,192,919 sh · $1.2B
11.78%
2.5%
Likely market behavior by outcome. Not investment advice.
Beat & raise
If Watsco beats expectations, history suggests a potential stock increase of around 2.85%, confirming a positive outlook.
In line / cautious
An in-line report may lead to muted reactions, reflecting ongoing investor caution.
Miss
If the company misses expectations, history suggests a decline of approximately 3.40%, indicating heightened concerns about its performance.
The lines on the call that would change the story.
Capital International Investors
3,485,525 sh · $985.2M
9.79%
0.2%
Capital Research Global Investors
1,902,230 sh · $537.7M
5.35%
0.2%
Vanguard Portfolio Management LLC
1,770,531 sh · $500.4M
4.97%
1.1%
FMR, LLC
1,705,273 sh · $482.0M
4.79%
-9.8%
13F filings updated quarterly. Position deltas show change in shares vs. the prior quarter.