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Grainger (GWW) Misses Q1 Earnings & Sales, Cuts '17 View

Zacks Equity Research

W.W. Grainger, Inc. GWW is a leading North American distributor of material-handling equipment, safety and security supplies. The company remains focused on providing the lowest total cost maintenance, repair and operating (MRO) solution to select customer groups.

Grainger expects to benefit from acquisitions, focus on restructuring and strong growth within its single channel businesses. Its focus on core businesses in North America, sales force effectiveness a and global growth of the online model will drive growth. However, fluctuation in oil prices and gross margin pressure will weigh on the company’s first-quarter 2017 results. Additionally, the underperforming Canada segment remains a concern.

Let’s have a quick look on Grainger’s first-quarter release.

Estimate Trend & Surprise History

Investors should note that the earnings estimate revisions for Grainger have moved north ahead of the first quarter earnings release. The Zacks Consensus Estimate has gone up 0.3% over the last 30 days and currently stands at $3.01 for the quarter.

As regards earnings surprise, Grainger has outpaced the Zacks Consensus Estimate in three out of the past four quarters, resulting in an average positive surprise of 1.87%.

W.W. Grainger, Inc. Price and EPS Surprise

 

W.W. Grainger, Inc. Price and EPS Surprise | W.W. Grainger, Inc. Quote

Earnings

Grainger posted adjusted earnings of $2.88 per share in the first-quarter of 2017. Earnings missed the Zacks Consensus Estimate of $3.01. Investors should note that these figures take out special items. Earnings also declined 9% year over year during the quarter owing to adverse effect of strategic pricing initiatives in the U.S.

Revenue

Grainger posted revenues of $2,541 million, which marginally fell short of the Zacks Consensus Estimate for revenues of $2,563 million.

Key Stats To Note

Grainger lowered its 2017 sales and earnings per share guidance for 2017 because of unfavourable strategic pricing actions in the U.S. The company now guides sales growth of 1% to 4%, down from the prior guidance of 2% to 6%. It also expects earnings per share to be in the range of $10.00 to $11.30 compared to the previous band of $11.30 to $12.40.

Zacks Rank

Currently, Grainger has a Zacks Rank #3 (Hold), but that could change following Grainger’s earnings report which was just released.

Market Reaction

Grainger’s shares were inactive following the release. It would be interesting to see how the market reacts to the results during the trading session today.

Check back later for our full write up on this Grainger’s earnings report later!

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