WW Grainger Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component WW Grainger (NYSE:GWW) will unveil its latest earnings tomorrow, Thursday, January 24, 2013. W.W. Grainger is a distributor of facilities maintenance products and provides services and related information used by businesses and institutions throughout North America.

WW Grainger Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of $2.61 per share, a rise of 22.5% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from $2.56. Between one and three months ago, the average estimate moved up. It has been unchanged at $2.61 during the last month. Analysts are projecting profit to rise by 17.5% compared to last year’s $10.62.

Past Earnings Performance: The company fell short of estimates last quarter after being in line with forecasts the quarter prior. In the third quarter, it reported net income of $2.81 per share versus a mean estimate of $2.90. Two quarters ago, it reported profit of $2.63 per share.

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A Look Back: In the third quarter, profit fell 14.7% to $155.4 million ($2.15 a share) from $182.1 million ($2.51 a share) the year earlier, missing analyst expectations. Revenue rose 7.9% to $2.28 billion from $2.11 billion.

Here’s how WW Grainger traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

GWW

Wall St. Revenue Expectations: Analysts are projecting a rise of 7.7% in revenue from the year-earlier quarter to $2.24 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.65 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 2.8 in the second quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 12.5% to $1.08 billion while assets rose 6.5% to $2.87 billion.

Key Stats:

After last quarter’s profit drop broke a string of income increases, this earnings announcement is definitely a chance for a rebound. Net income rose 12.3% in the fourth quarter of the last fiscal year, 18.7% in the first quarter and 12.3% in the second quarter before declining in the third quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 13.7% in the fourth quarter of the last fiscal year, 16.4% in the first quarter and 12.3% in the second quarter before increasing again in the third quarter.

Analyst Ratings: There are mostly holds on the stock with eight of 15 analysts surveyed giving that rating.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)