Graco Earnings: Here’s Why Investors Don’t Like These Results

Graco Inc. (NYSE:GGG) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 0.29%.

Graco Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 64.29% to $0.92 in the quarter versus EPS of $0.56 in the year-earlier quarter.

Revenue: Rose 6.64% to $286 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Graco Inc. reported adjusted EPS income of $0.92 per share. By that measure, the company beat the mean analyst estimate of $0.85. It beat the average revenue estimate of $281.28 million.

Quoting Management: “Thanks to the great efforts and dedication of our employees and distributors around the world, Graco achieved new quarterly records in the second quarter for both sales and earnings,” said Patrick J. McHale, Graco’s President and Chief Executive Officer. “Sales grew at a double-digit pace in the Americas, driven by 28 percent growth in our Contractor segment, which benefitted from an initial stocking of expanded product offerings in the home center channel and the ongoing recovery in the U.S. housing market. The Industrial segment in the Americas returned to growth in the second quarter, reflecting an increase in demand that was broad based throughout product categories. Macroeconomic conditions remained a headwind in the second quarter for regions outside of the Americas, however. In EMEA, sales grew slightly in the second quarter, aided by channel expansion in our Lubrication segment and stronger demand for Contractor segment products in emerging markets. In our Asia Pacific region, sales declined 6 percent in the second quarter, reflecting ongoing weakness in mining and general industrial applications.”

Key Stats (on next page)…

Revenue increased 6.3% from $269.05 million in the previous quarter. EPS increased 9.52% from $0.84 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.75 to a profit $0.79. For the current year, the average estimate has moved up from a profit of $3.02 to a profit of $3.22 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at]