Stock Monitor: Applied Industrial Technologies Post Earnings Reporting
LONDON, UK / ACCESSWIRE / May 4, 2018 / If you want access to our free earnings report on W.W. Grainger, Inc. (NYSE: GWW) ("Grainger") all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=GWW. Grainger reported its first-quarter fiscal 2018 operating and financial results on April 19, 2018. The seller of maintenance and other supplies outperformed top- and bottom-line expectations. Register today and get access to over 1,000 Free Research Reports by joining our site below:
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Earnings Highlights and Summary
For the first quarter 2018, Grainger's sales of $2.77 billion increased 9% versus sales of $2.54 billion in Q1 2017, driven by an 8 percentage point increase from volume, 2 percentage points gain from foreign exchange, and 1 percentage point from higher sales of seasonal products, partially offset by a 1 percentage point decline in price and a 1 percentage point decline from the divestiture of a specialty business. The Company's reported numbers beat analysts' estimates of $2.71 billion.
During Q1 2018, Grainger's operating earnings of $334.8 million rose 14% versus $292.5 million in Q1 2017, driven by higher sales and strong expense leverage. For the reported quarter, the Company's effective tax rate was 21.6% versus 32.4% in the year-ago comparable period. The decrease was primarily due to the 2017 tax legislation.
Grainger's net earnings were $231.5 million, or $4.07 per diluted share, for Q1 2018 compared to $174.7 million, or $2.93 per share, in Q1 2017. On an adjusted basis, the Company recorded earnings of $4.18 per diluted share, up 45% compared to earnings of $2.88 per diluted share in the prior year's corresponding quarter. Grainger's earnings beat Wall Street's estimates of $3.41 per share.
W.W. Grainger's Segment Results
During Q1 2018, sales for the US segment increased 8% to $2.11 billion compared to $1.95 billion in Q1 2017, driven by 9 percentage points from volume growth, 1 percentage point from intercompany sales, and 1 percentage point from higher sales of seasonal products, partially offset by a 2 percentage point decline in price and a 1 percentage point decline from the divestiture of a specialty business.
For Q1 2018, the US segment's gross profit margins declined 1.0 percentage point driven by the Company's strategic price initiatives, partially offset by positive customer mix. Operating earnings for the US segment advanced 15% to $334.8 million on a y-o-y basis compared to $292.5 million in Q1 2017, driven by higher sales and improved expense management.
During Q1 2018, Grainger's sales for Canada decreased 2% to $181.8 million compared to $186.1 million in Q1 2017. The segment recorded a 13-percentage point decline in volume, partially offset by 7 percentage points from higher price. The business in Canada posted a $20 million operating loss in the reported quarter versus a $17 million operating loss in the prior year's same quarter, primarily driven by higher restructuring expenses. The gross profit margin in Canada increased 3.3 percentage points versus the prior year largely due to price increases that began in late 2017.
For Q1 2018, Grainger's sales for the Other Businesses jumped 18% to $588.1 million compared to $497.4 million in Q1 2017, consisting of 12 percentage points of growth from volume and price and 6 percentage points from foreign exchange. The performance was driven by 24% sales growth for the single channel online businesses. Operating earnings for the Other Businesses were $36 million in Q1 2018 versus $32 million in Q1 2017 and included strong results from MonotaRO in Japan and Zoro in the United States and improved performance from the international businesses.
Grainger's operating cash flow was $147 million for Q1 2018 versus $181 million in Q1 2017. The Company used the cash generated during the quarter to invest in the business and return cash to shareholders through share repurchase and dividends. Capital expenditures in the reported quarter were $49 million. In Q1 2018, Grainger returned $245 million to shareholders through $72 million in dividends and $173 million to buy back 668,000 shares of stock.
Stock Performance Snapshot
May 3, 2018 - At Thursday's closing bell, W.W. Grainger's stock slightly declined 0.38%, ending the trading session at $279.84.
Volume traded for the day: 690.44 thousand shares.
Stock performance in the last three-month – up 5.15%; previous six-month period – up 41.55%; past twelve-month period – up 45.73%; and year-to-date – up 18.45%
After yesterday's close, W.W. Grainger's market cap was at $15.31 billion.
Price to Earnings (P/E) ratio was at 25.19.
The stock has a dividend yield of 1.83%.
The stock is part of the Services sector, categorized under the Industrial Equipment Wholesale industry.
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