Watsco Inc. (WSO) recently reported its second quarter results. The company reported net income of $0.61 per share, in line with our expectations, but 35% lower compared to last year. The decline in earnings was primarily due to lower revenue led by a weak housing market.

The company’s total revenue was down 20.6% driven by weak demand due to economic conditions, decline in new housing, and a late start to the cooling season. Sales in the quarter were also impacted by lower pricing for certain products that are sensitive to changes in commodity prices.

Second quarter’s revenue reflects a 15% decline in sales of air conditioning and heating (HVAC) equipment, a 28% decline in sales of other HVAC products and a 15% decline in sales of refrigeration products.

The rapid decline in housing starts is being a drag on overall unit demand. We expect the housing market to remain challenging for the

Watsco, Inc. (WSO) said that it completed its previously announced joint-venture, named Carrier Enterprises LLC, with Carrier Corporation. Watsco is the largest distributor of air conditioning, heating, and refrigeration equipment as well as related parts and supplies (HVAC/R) in the United States. Carrier, a unit of United Technologies Corp., provides heating, air-conditioning and refrigeration solutions with operations in more than 170 countries. Watsco owns 60% of the joint venture with options to purchase an additional 20% from Carrier in future years. Carrier Enterprises will operate 110 locations in 20 states and Puerto Rico, the Caribbean and Latin America and serve over 19,000 air conditioning and heating contractors. Carrier is contributing 95 locations in the U.S. Sunbelt and Puerto Rico and the export division located in Miami, Florida, while Watsco is contributing 15 locations in 8 states. The operations will sell Carrier, Bryant and Payne-branded residential and light-commercial