) is set to report fourth quarter 2012 results before the opening
bell on January 17. Last quarter it posted in-line results. Let's
see how things are shaping up for this announcement.
Positive and Negative Factors to Consider
Fastenal's daily sales growth rates in the second and third
quarters of 2012 were lower than the first quarter as well as
year-ago comparable periods. Daily sales growth rates of
manufacturing customers (representing almost 50% of revenues)
have declined sharply due to lower sales of its fasteners product
line (used mainly for industrial production), which are being
hurt by slowdown in end market and broader economic uncertainty.
We believe that the shift of resources to Fastenal's vending
program (FAST Solutions) may also be hurting fastener sales and
eventually affect margins.
The second quarter was very weak for Fastenal in terms of
sales growth. However, the company did see signs of some
improvement in demand in the third quarter. The construction
market has somewhat bounced back while the manufacturing market
has remained almost consistent. The company is also seeing some
progress around its vending program.
No Improvement Expected in Fourth Quarter
The Zacks Consensus Estimate for the fourth quarter stands at
33 cents, while that for fiscal 2012 stands at $1.42.
Fastenal has beaten estimates only once in the last four
quarters while meeting estimates the other three. Moreover, the
stock has mostly seen downward estimate revisions in the past 60
The Zacks Consensus Estimate for the fourth quarter has gone
down by almost 3% over the last 90 days, since the announcement
of the third quarter results. While that for fiscal 2012 have
gone down by 0.7% and for fiscal 2013 have gone down by 1.2% over
the same time frame.
The downward pressure on estimates signals that the fourth
quarter might not be too different from the past two quarters
despite some improvement in demand. Moreover, the stock carries a
Zacks Rank #3 (Hold).
Other Stocks to Consider
With the overall housing market improving steadily, there are
many housing companies that are likely to beat earnings this
quarter. A stock needs to have both a positive Earnings ESP and a
Zacks Rank of #1, 2 or 3 for this to happen. Here are some other
companies you may want to consider as our model shows they have
the right combination of elements to post an earnings beat this
), Earnings ESP of +20.9% and Zacks Rank #1 (Strong Buy)
Meritage Homes Corporation
), Earnings ESP of + 9.52% and Zacks Rank #1 (Strong Buy)
ESP stands for Earnings Surprise Prediction which represents
the difference between the Most Accurate estimate and the Zacks
About Earnings ESP
Would you like to own more stocks likely to beat their next
earnings report? And avoid stocks likely to disappoint?
If yes, then it's time you learn about the Earnings ESP score
available on Zacks.com.
FASTENAL (FAST): Free Stock Analysis Report
LENNAR CORP -A (LEN): Free Stock Analysis
MERITAGE HOMES (MTH): Free Stock Analysis
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