GWW WW Grainger Inc

   By Austen Hufford 
 

W.W. Grainger Inc. released its second-quarter earnings before the market opened Wednesday. Here's what you need to know.

REVENUE: Total revenue rose 9.4% to $2.86 billion. Growth was largely driven by a nine percentage-point increase from volume. Analysts were expecting revenue of $2.71 billion.

PROFIT: The company reported a profit of $237 million, or $4.16 a share, up from $97.9 million, or $1.67 a share, a year before. On an adjusted basis, earnings per share grew to $4.37 from $2.74, well above the $3.70 expected by analysts polled by FactSet. The company said the increase in earnings was due to higher sales, a lower tax rate, a lower share count and operating expense leverage, which is when a company benefits from lower variable costs relative to its fixed costs.

SHARES: In premarket trading, shares rose 5.6% to $322.

OUTLOOK: The company raised its revenue and sales outlook for the year. It now expects revenue of $11 billion to $11.3 billion, compared with $10.9 billion to $11.3 billion before. It expects adjusted earnings per share between $15.05 and $16.05, compared with between $14.30 and $15.30 before.

TAX RATE: The company's effective tax rate in the quarter was 23.4%, well below the 48.4% in the same quarter of 2017, due to the new U.S. tax law and an impact from the wind-down of the company's Colombia business.

QUOTE: "The second quarter exceeded our expectations, with strong growth from U.S. large and medium customers," Chief Executive D.G. Macpherson said. "We continue to gain share across both large and medium customers and acquire medium customers amid a strong economy."

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

July 18, 2018 09:34 ET (13:34 GMT)

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