Grainger (NYSE: GWW) reported sales of $2.4 billion for the third quarter of 2013, an increase of 5 percent over the $2.3 billion in sales that the company reported for the same period last year. The distributor’s sales on a daily basis increased 4 percent versus the third quarter of 2012. Net earnings for the third quarter increased 36 percent to $211 million versus $155 million in 2012. Earnings per share of $2.95 increased 37 percent versus $2.15 in 2012.
Grainger’s U.S. sales increased 7 percent (6 percent on a daily basis) during the third quarter versus the prior year. The 6 percent daily sales growth was driven by 5 percentage points from volume and 1 percentage point from acquisitions. Grainger’s quarterly operating earnings in the U.S. increased 39 percent versus the second quarter of 2013. Excluding the 2012 reserves, operating earnings increased 6 percent, primarily driven by sales growth.
During the third quarter, Grainger’s Canadian sales decreased 1 percent (2 percent on a daily basis) versus the prior year. In local currency, sales increased 4 percent, 2 percent on a daily basis on higher volume. The sales increase for the quarter in Canada was led by solid growth to customers in the oil and gas, forestry, light manufacturing, and utilities end markets.
Operating earnings in Canada decreased 7 percent in the 2013 third quarter for Grainger (down 3 percent in local currency). The lower operating performance was primarily the result of approximately $3.5 million in incremental spending for the new IT system scheduled for implementation in late-2014.
Daily sales for Grainger’s other businesses – including operations primarily in Asia, Europe and Latin America – were flat during the third quarter versus the prior year. This performance consisted of 7 percentage points of growth from volume and price, offset by a 7 percentage point decline from unfavorable foreign exchange.
“Despite a challenging environment, our U.S. business delivered solid volume growth and earnings that were in line with our expectations,” said Chairman, President and Chief Executive Officer Jim Ryan, in a company press release. “Our businesses outside of the United States remain affected by weaker macroeconomic conditions and unfavorable foreign exchange rates.”
Grainger now expects 2013 sales growth of 5 to 6 percent and earnings per share of $11.45 to $11.65. The company’s previous 2013 guidance issued on July 17, 2013, was sales growth of 5 to 8 percent and earnings per share of $11.40 to $12.00.Tagged with tED