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Grainger's (GWW) Earnings and Sales Beat Estimates in Q3

W.W. Grainger, Inc.GWW is a leading North American distributor of material-handling equipment, safety and security supplies. The company remains focused on providing the lowest total cost maintenance, repair and operating (MRO) solution to select customer groups.

The company is anticipated to benefit from its key initiatives, including sales force effectiveness and vertical alignment of the sales force in the United States, medium-sized customer acquisition and growth of the online model globally. It remains focused on creating value for customers, delivering a seamless customer experience and reducing costs in 2017. In the second half of 2017, Grainger estimates volume growth will be between 6% and 8%, driven by price changes and marketing advertisements.

However, Grainger's results in the near term will be affected by inflationary expenses. Even though Grainger remains focused on improving gross margins and reducing its cost structure in Canada, the segment continues to be challenged due to higher expenses. In addition, Grainger's oil and gas and energy exposure in Canada is very high.

Let's have a quick look at Grainger's third-quarter release.

Estimate Trend & Surprise History

Investors should note that the earnings estimate revisions for Grainger have moved south ahead of the third quarter earnings release. The Zacks Consensus Estimate has gone down 0.8% over the last 60 days and currently stands at $2.57 for the quarter.

W.W. Grainger, Inc. Price and EPS Surprise

W.W. Grainger, Inc. Price and EPS Surprise | W.W. Grainger, Inc. Quote

As regards earnings surprise, Grainger has outpaced the Zacks Consensus Estimate in three out of the past four quarters, resulting in an average positive surprise of 1.35%.

Earnings

Grainger posted adjusted earnings of $2.90 per share in the third-quarter of 2017. Earnings beat the Zacks Consensus Estimate of $2.57. Investors should note that these figures take out special items.

Revenue

Grainger posted revenues of $2,636 million, which also beat the Zacks Consensus Estimate for revenues of $2,629 million.

Key Stats To Note

Grainger lowered its 2017 guidance. The company now expects earnings per share for 2017 will be in the range of $10.40 to $10.90 and sales growth in the range of 1.5% to 2.5%. The company's previous guidance of sales growth was in the range of 1 to 4% and earnings per share was between $10.00 and $11.30.

Zacks Rank

Currently, Grainger has a Zacks Rank #4 (Sell), but that could change following Grainger's earnings report which was just released.

Market Reaction

Grainger's shares were inactive following the release. It would be interesting to see how the market reacts to the results during the trading session today.

Check back later for our full write up on this Grainger's earnings report later!

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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 Nasdaq, Inc.


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

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