LAKE FOREST, Ill. (AP) — W.W. Grainger Inc. (GWW) on Tuesday reported second-quarter earnings of $172.7 million.
The Lake Forest, Illinois-based company said it had profit of $2.79 per share. Earnings, adjusted for restructuring costs, came to $2.89 per share.
The results missed Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for earnings of $3.17 per share.
The seller of maintenance and other supplies posted revenue of $2.56 billion in the period, which also missed Street forecasts. Nine analysts surveyed by Zacks expected $2.59 billion.
W.W. Grainger expects full-year earnings to be $11.20 to $12.20 per share.
W.W. Grainger shares have increased 13 percent since the beginning of the year, while the Standard & Poor’s 500 index has increased 6 percent. The stock has dropped 1.5 percent in the last 12 months.
“Grainger and our industry remain challenged by the difficult industrial environment. The U.S. business performed slightly below our expectations due to lower sales volume that was partially offset by better than expected gross profit margins. We managed expenses tightly in the quarter given the lower sales volume. Our Canadian business continued to be affected by low oil prices, the fires in Fort McMurray and unfavorable foreign exchange. While these headwinds will likely remain in the near term, we have confidence in our Canadian leadership team and the steps we are taking to return to long-term profitability. A bright spot for the quarter was the continued strong performance of our single channel online businesses, which posted topline growth of 34 percent,” said Chairman, President and Chief Executive Officer Jim Ryan. Ryan concluded, “Despite the significant shortfall in Canada, which contributed to quarterly performance below our expectations, I have great confidence that we have positioned Grainger to capitalize on the attractive growth opportunity in the large and fragmented MRO market.”
The company also revised its 2016 sales and earnings per share guidance and now expects sales growth of 1 to 4 percent and earnings per share of $11.20 to $12.20 for the year. The company’s previous 2016 guidance, communicated on April 18, 2016, included sales growth of 0 to 6 percent and earnings per share of $11.00 to $12.80.
Tagged with earnings, grainger, tED