Shares of Watsco Inc. (NYSE: WSO), a leading HVAC/R equipment distributor, plummeted over 5% in premarket trading on Tuesday after the company reported disappointing third-quarter results, missing analysts' estimates on both earnings and revenue. The earnings miss and slower growth rates reflected ongoing challenges in regaining market share from a major OEM partner after supply chain disruptions in 2023.

For the quarter ended September 30, 2024, Watsco reported earnings per share of $4.22, falling short of Wall Street's expectations of $4.75 per share by 11.16%. The company's revenue of $2.16 billion also missed analysts' projections of $2.24 billion by 3.74%, though it represented a 1.55% increase from the same period last year.

Watsco's results were impacted by its efforts to regain sales and market share from one of its primary OEM partners after product disruptions and supply chain issues had affected customer relationships in 2023. The company and its partner co-invested to attract new customers and recapture lost accounts, which weighed on gross margins by approximately 30 basis points for the nine-month period.