W.W. Grainger, Inc.
), a broad line supplier of maintenance, repair and operating (MRO)
products, is slated to report second-quarter fiscal 2014 results on
Jul 17. In the last quarter, it posted a positive surprise of
3.37%. Let's see how things are shaping up for this announcement.
Factors Influencing this Quarter
Grainger reported a 6% year-over-year increase in sales in May
2014. The growth has exceeded the prior-month increase of 5% and is
also up from the growth rate of 5% achieved in May last year.
Grainger's overall sales have grown from the slow start at the
beginning of the year due to inclement weather. So far in 2014, the
United States has delivered the highest growth of 8% in May.
Even though Canada continued to be in the red, the rate of decline
has meandered to single digit from the double-digit dip reported in
the previous months. Grainger's business in Canada however
continues to face a sluggish macroeconomic environment and
unfavorable currency exchange. The weakness in the Canadian economy
is due to lower commodity prices and a reduction in Canadian
According to Grainger, daily sales growth in June was in line with
May. Grainger remains focused on expanding its product offerings,
sales force as well as shares of its private label products.
Grainger also continues to grow through acquisitions.
Our proven model does not conclusively show that Grainger is likely
to beat earnings estimates this quarter. This is because a stock
needs to have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. This is not the
case here, as you will see below.
: Grainger has an Earnings ESP (Expected Surprise Prediction) of
-1.61%. This is because the Most Accurate estimate stands at $3.06
per share while the Zacks Consensus Estimate is higher at $3.11,
resulting in -1.61% ESP.
Zacks Rank #4 (Sell)
: Grainger has a Zacks Rank #4 which when combined with a -1.62%
ESP makes surprise prediction unlikely. We caution against stocks
with Zacks Rank #4 and #5 (Sell rated stocks) going into the
earnings announcement, especially when the company is seeing
negative estimate revisions.
Stocks that Warrant a Look
Here are some other companies you may want to consider as our model
shows that these have the right combination of elements to post an
) has an earnings ESP of +0.67% and a Zacks Rank #1 (Strong Buy).
) has an earnings ESP of +0.89% and a Zacks Rank #2 (Buy).
) has an earnings ESP of +1.12% and a Zacks Rank #3 (Hold).
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