) is set to report first quarter 2013 results before the opening
bell on Apr 10. Last quarter it posted in-line results. Let's see
how things are shaping up for this announcement.
Growth Factors this Past Quarter
Fastenal reported a 10% year-over-year increase in earnings
per share on the back of decent margin growth. The company
witnessed 8% year-over-year rise in revenues in the fourth
quarter 2012. However, both revenue and earnings declined
Fastenal's daily sales growth rates in the second, third and
fourth quarters of 2012 were lower than that of the first quarter
as well as year-ago comparable periods mainly due to weakness in
its fastener product line. Its fasteners product line has
suffered due to end market slowdown and broader economic
Daily sales to manufacturing customers (representing almost
50% of revenues) grew 9.7% in the fourth quarter, much below
growth rates of 21.0% in the prior-year quarter and 14.0% in the
Our proven model does not conclusively show that Fastenal is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here as you will see below.
Negative Zacks ESP:
The stock has a negative ESP of -5.41%.
Zacks Rank #3 (Hold):
Fastenal's Zacks Rank #3 lowers the predictive power of ESP
because the Zacks #3 Rank when combined with a negative ESP makes
surprise prediction difficult. We caution against stocks with
Zacks Ranks #4 and #5 (Sell rated stocks) going into the earnings
announcement, especially when the company is seeing negative
estimate revisions momentum.
Other Stocks to Consider
With the overall housing market improving steadily, there are
many companies that are likely to beat earnings this quarter.
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 quarter:
Ryland Group Inc.
), Earnings ESP of + 10.00% and Zacks Rank #1 (Strong Buy)
The Home Depot, Inc.
) , Earnings ESP of +7.90% and Zacks Rank #3 (Hold)
), Earnings ESP of + 36.36% and Zacks Rank #2 (Buy)
FASTENAL (FAST): Free Stock Analysis Report
HOME DEPOT (HD): Free Stock Analysis Report
KB HOME (KBH): Free Stock Analysis Report
RYLAND GRP INC (RYL): Free Stock Analysis
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