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13 years ago
GWW WW Grainger 1Q Net Jumps 19% On Volumes, Acquisitions
PROVIDED BY Dow Jones & Company, Inc. - 8:41 AM 04/17/2012
DOW JONES NEWSWIRES
W.W. Grainger Inc.'s (GWW) first-quarter earnings jumped 19%, driven by stronger volume and a boost from the industrial-goods supplier's acquisitions.
"Our record performance in the quarter is further evidence that we are realizing the benefits or our growth initiatives," said Chief Executive Jim Ryan, citing the company's product line, sales force, online sales and international expansion.
For the current year, the company raised its guidance to earnings between $ 10.40 and $10.80 a share, from its January projection between $9.90 to $10.65. The company also said its sales growth would be on the higher end of its previously projected 10% to 14% range.
Grainger, which offers goods ranging from lighting to janitorial products, has posted double-digit earnings growth in recent quarters, amid demand from businesses and institutions trying to consolidate suppliers. The company, which is sometimes seen as a bellwether for the national economy because of the breadth of its offerings, has recently seen its stock soar as investors see Grainger benefiting from the surprise resurgence of U.S. manufacturing.
Grainger has also expanded its global footprint through acquisitions, most recently buying Brazilian industrial supplies distributor AnFreixo S.A. But the company's international expansion has experienced some bumps along the way; in late February, Grainger said it was investigating whether employees of its Chinese subsidiary had bribed foreign officials, a violation of U.S. law.
Grainger reported a profit of $187.5 million, or $2.57 a share, up from $157.9 million, or $2.18 a share, a year earlier. Revenue jumped 16% to $2.19 billion.
Analysts polled by Thomson Reuters recently projected earnings of $2.52 on revenue of $2.19 billion.
Gross margin rose to 44.4% from 44.1%.
Sales in the U.S., which account for the bulk of total revenue, rose 11%. In Canada, sales grew 13%, or 14% in local currency. Sales from other businesses segment, including the recently acquired Fabory Group, a European fastener distributor, jumped 104%. Excluding Fabory, sales for the segment grew 33%, on a boost from growth in Japan and Mexico.
Shares were down $1.82 to $213.77 in premarket trading. The stock has surged 113% in the past six months.
-By Kristin Jones; Dow Jones Newswires
(END) Dow Jones Newswires
04-17-12 0841ET
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