Grainger Profit Misses Estimates; Cuts FY Outlook - Update

(RTTNews) - Specialty supplier Grainger (GWW), Friday reported an increase in fourth-quarter profit, on a seven percent growth in sales, largely offset by impairment and other charges. Earnings for the quarter came in short of Wall Street estimates, while sales exceeded expectations.

Looking ahead to 2014, the company slashed its outlook citing a weak Canadian dollar and the year-end divestiture of a number of direct marketing Specialty Brands, with caution over the global economic softness.

Grainger shares are down 3.5 percent in morning trade on the New York Stock Exchange.

Grainger distributes maintenance, repair, and operating supplies for businesses in the US and Canada. Products provided include material handling equipment, safety supplies, electrical products, among others.

The Lake Forest, Illinois-based company posted quarterly net earnings of $156.8 million or $2.20 per share, compared with $156.3 million or $2.17 per share last year.

Results for the quarter included non-cash impairment charges of $0.29 per share for businesses in Brazil and the US, as well as restructuring charges of $0.10 per share related to Europe and China. The prior year had similar charges of $0.25 per share.

Excluding items, adjusted earnings for the quarter were $2.59 per share, compared with $2.42 per share a year ago. On average, 20 analysts polled by Thomson Reuters expected earnings of $2.62 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter climbed to $2.38 billion from $2.23 billion in the prior year. Seventeen analysts had a consensus revenue estimate of $2.37 billion for the quarter.

Volumes and acquisition propped up sales, but were somewhat offset by foreign exchange losses and the impact of the 2012 Hurricane Sandy.

Among regions, US sales climbed 10 percent from last year, while currency losses dragged down Canadian sales by 3 percent. Sales including regions of Asia, Europe and Latin America were up 3 percent.

For fiscal year 2014, Grainger now expect earnings in the range of $12.10 to $12.85 per share and sales growth of 5 percent to 9 percent. The company had earlier estimated earnings of $12.25 to $13 per share and sales growth of 6 percent to 10 percent growth.

Analysts currently expect earnings of $12.99 on sales growth of 8.3 percent for the year.

Grainger stock is trading at $247.60, down $9.06 or 3.53%, on a volume of 821 thousand shares on the NYSE.