(FORTUNE Magazine) – -- WATSCO Watsco thrives by taking the misery out of summer in the Sunbelt. The company, in Coconut Grove, Florida, is the country's largest independent distributor of central air-conditioning systems to the residential market. The outlook for business is particularly good now, because millions of air-conditioning systems installed during the great migrations to Florida and California in the 1970s and 1980s are wearing out. Says Watsco CEO Albert Nahmad: ''If you live in the Sunbelt, you replace your air conditioner. It isn't a luxury. It's a necessity.'' Nahmad says most of the company's revenues come from the replacement market, but adds, ''We'll get a real kick in sales as homebuilding recovers.'' Watsco got a totally unexpected kick last summer, replacing air-conditioning systems in many of the 90,000 homes damaged by Hurricane Andrew. Lloyd Widom, a Prudential Securities analyst, forecasts that in 1993 -- Watsco's first full year of hurricane-related business -- net income will rise 65%, to $4.8 million, on a 14% jump in revenues, to $221 million. The stock traded recently at $12, or ten times his estimate for 1993 earnings per share. Although 75% of Watsco's revenues come from distributing air-conditioning systems made by others, its own components manufacturing business is growing so fast that Nahmad says sales will be evenly split within five years. Previously, Watsco made only replacement parts that wholesalers sold to repairmen. But recently it began producing electronic temperature controls for original equipment manufacturers. Widom says the 35% to 40% profit margins from manufacturing are almost twice those of the distribution business. Last year the company started to make equipment that captures and cleans the chlorofluorocarbons (CFCs) used as a coolant in refrigeration and air- conditioning systems. Watsco's product, called Flash, enables repairmen to suck out ozone-destroying CFCs from the compressor and filter them for immediate reuse. Usually CFCs are released into the atmosphere and replaced with new coolant. Watsco, which distributes Flash nationwide, believes the market will grow rapidly once the Environmental Protection Agency begins enforcing a new law that prohibits releasing CFCs into the air.

HYDE ATHLETIC INDUSTRIES -- Hyde Athletic Industries had a shoe, it seemed, that only a serious runner could love. Then last spring Consumer Reports rated its Saucony brand No. 1 for cost, performance, and comfort -- and sales took off. CEO John Fisher, whose great-grandfather founded the Peabody, Massachusetts, company in 1906, says the number of outlets carrying Saucony has increased 25% since the report appeared. ''We were able to jump up the ladder to the top of the consumer's consciousness,'' Fisher says. Will Danoff, portfolio manager of the Fidelity Contra Fund, expects Hyde's net income for 1993 to increase 46%, to $5 million, on a 28% rise in sales, to $110 million. The stock traded recently at $25.50, or 14 times his 1993 earnings-per-share estimate. Fisher plans to expand the Saucony brand -- now 75% of Hyde revenues -- beyond the running world into what he calls the ''outdoor rugged walking'' market, which includes hiking. He says the family business won't go head to head with the likes of Nike and Reebok to sell basketball shoes: ''We let them take what they're going to take, and we fight for what's left over.'' While Nike and Reebok produce abroad, Hyde makes Saucony at home. The company's factory in Bangor, Maine, has tripled its work force in the past year; it is also retooling to manufacture in a one-day shift what it now makes in a day and a night.

ATLANTIC SOUTHEAST AIR -- Under Delta's wing, Atlantic Southeast Airlines has grown into the country's most profitable regional carrier. Delta owns 23% of the company, and its reservation system automatically puts Delta passengers on ASA's connecting flights out of Atlanta and Dallas-Fort Worth. Says analyst James Parker of Atlanta's Robinson-Humphrey brokerage firm: ''The thing that is so good about ASA is that it is in Atlanta. That is the best airline market in the country because both traffic density and prices are relatively high.'' Parker expects 1993 net income to increase 48%, to $55 million, on a 29% rise in sales, to $305 million. The stock traded recently at $29.50, or 18 times his estimate for 1993 earnings per share. Later this year ASA will add service from Dallas to eight cities; Delta is pulling out of five of them and reducing flights to the others. For ASA, which is investing $100 million to increase its capacity out of Dallas by 114%, the expansion is virtually risk-free. ''The market is already there,'' says Parker. ''It's not as if ASA has to build traffic.''