W.W. Grainger Inc. Earnings Cheat Sheet: Revenue Grows By Double-Digits For Fifth Straight Quarter

S&P 500 (NYSE:SPY) component W.W. Grainger Inc. (NYSE:GWW) reported net income above Wall Street’s expectations for the third quarter. W.W. Grainger is a distributor of facilities maintenance products and provides services and related information used by businesses and institutions throughout North America.

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W.W. Grainger Earnings Cheat Sheet for the Third Quarter

Results: Net income for W.W. Grainger Inc. rose to $182.1 million ($2.51 per share) vs. $150.4 million ($2.06 per share) in the same quarter a year earlier. This marks a rise of 21.1% from the year earlier quarter.

Revenue: Rose 11.3% to $2.11 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: GWW beat the mean analyst estimate of $2.34 per share. Analysts were expecting revenue of $2.09 billion.

Quoting Management: “This was an exceptional quarter for Grainger,” said Chairman, President and Chief Executive Officer Jim Ryan. “We saw consistent, double-digit, sales growth each month of the quarter and delivered strong earnings growth and cash flow. Grainger’s ability to help customers do more with less has been key to our success. Our growth drivers such as product line expansion, eCommerce, inventory management services and sales force expansion are paying off and helping us gain share. Given our strong performance to date, we are aggressively investing in these proven growth drivers to help meet customers’ needs, create competitive advantage and grow the business.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 13.5%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose 19.5% from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 31.6% and in the first quarter, the figure rose 59.2%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 11 cents in the second quarter, by 39 cents in the first quarter, and by 11 cents in the fourth quarter of the last fiscal year.

Gross margins grew 1.6 percentage points to 43.2%. The growth seemed to be driven by increased revenue, as the figure rose 11.3% from the year earlier quarter while costs rose 8.3%.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from $2.05 a share to $2.01 over the last ninety days. Over the past three months, the average estimate for the fiscal year has climbed from $8.72 per to share to $8.76.

Competitors to Watch: Fastenal Company (NASDAQ:FAST), Interline Brands, Inc. (NYSE:IBI), Anixter International Inc. (NYSE:AXE), WESCO International, Inc. (NYSE:WCC), Watsco, Incorporated (NYSE:WSO), Houston Wire & Cable Co. (NASDAQ:HWCC), Hudson Technologies, Inc. (NASDAQ:HDSN), Snap-on Incorporated (NYSE:SNA), and Record Electric SAECA (NYSE:REC).

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(Source: Xignite Financials)

 

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