W.W. Grainger, Inc. (GWW): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


Grainger's first-quarter 2014 earnings per share (EPS) increased 4% year over year to $3.07 per share, a first quarter record. The company maintained its EPS guidance in the range of $12.10 $12.85 per share for 2014. Grainger will benefit in the long term from its focus on expanding its sales force, product offerings and acquisitions, as well as continued investment in e-commerce. Furthermore, Grainger's sound balance sheet and cash flow allow it to invest in growth opportunities, raise dividends and repurchase shares. However, the Canada segment continues to be affected by a weak macroeconomic environment and unfavorable currency exchange. Taking into account these pros and cons, we have maintained our Neutral recommendation with a target price of $265.


Incorporated in 1928, in the State of Illinois, W.W. Grainger Inc. (GWW) is a leading North American distributor of material handling equipment, safety and security supplies, lighting and electrical products, power and hand tools, pumps and plumbing supplies, cleaning and maintenance supplies, forestry and agriculture equipment, building and home inspection supplies, vehicle and fleet components, and various aftermarket components. It also offers services comprising inventory management and energy efficiency solutions. The company has a multi-channel business model consisting of a network of branches, a field sales force, direct marketing and Internet channels. Grainger has operating facilities, both self-owned as well as leased across the U.S. and Canada. It has nearly 710 branches, 33 distribution centers and multiple websites.

The company reports revenues under two business segments the United States, which contributed 78% to total revenue in the first quarter of 2014 and Canada with a contribution of 11%. The businesses from operating units in Japan, Mexico, India, Puerto Rico, China, Panama and Columbia and Fabory Group are all combined and included in Other Businesses and are not individually considered as reportable segments. The Other Businesses contributed nearly 11% to the company's revenue for the quarter.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: EPS , GWW



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