Watsco, Inc. WSO came up with stellar performance for first-quarter 2021. Both earnings and sales topped the respective Zacks Consensus Estimate as well as grew impressively on a year-over-year basis. The solid results were mainly backed by strong sales growth, a richer sales mix of high-efficiency systems, improved selling margins and operating efficiencies. Shares of the company jumped more than 2% on Apr 22, post the earnings release.Solid first-quarter results also reflect continued investments in products, technology, and people to drive sales as well as innovation throughout the business.Inside the NumbersWatsco’s quarterly earnings of $1.39 per share surpassed the consensus estimate of 91 cents. The reported earnings also improved 93% year over year.Watsco, Inc. Price, Consensus and EPS Surprise Watsco, Inc. price-consensus-eps-surprise-chart | Watsco, Inc. QuoteTotal sales of $1.14 billion topped the consensus mark of $1.08 billion by 5.6% and increased 14% from the year-ago period. The upside stemmed from strong HVAC equipment business. Persistent investment in technologies designed to revolutionize customer experience added to the positives. Notably, e-commerce sales for the quarter grew 18% year over year on 30% increased e-commerce transactions.Sales of HVAC equipment (heating, ventilating and air conditioning; comprising 67% of sales) were up 14% year over year, including 18% growth in U.S. residential markets. Sales of other HVAC products (29% of sales) increased 11% from the prior-year quarter. Sales from commercial refrigeration products (4% of sales) rose 10% year over year.Operating HighlightsGross margin expanded 130 basis points (bps) to 25.9%. SG&A expenses, however, increased 7% year over year. Nonetheless, SG&A expenses — as a percentage of sales — reduced 100 bps year over year. Operating margin expanded 270 bps year over year to 7.2%.Financial OperationsAs of Mar 31, 2021, cash and cash equivalents were $93.9 million compared with $146.1 million at 2020-end. Cash used in operations were $37.7 million for the first three months of 2021 versus $41.9 million cash provided from operations in the comparable year-ago period.Zacks RankWatsco — which shares space with AAON, Inc. AAON, Comfort Systems USA, Inc. FIX and Lennox International Inc. LII in the Zacks Building Products - Air Conditioner and Heating industry — currently carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Top 10 Stocks for 2021In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021? Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.Access Zacks Top 10 Stocks for 2021 today >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Watsco, Inc. (WSO): Free Stock Analysis Report Lennox International, Inc. (LII): Free Stock Analysis Report AAON, Inc. (AAON): Free Stock Analysis Report Comfort Systems USA, Inc. (FIX): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research