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Why WW Grainger Inc's Shares Popped 12% Today

Worker managing warehouse inventory.

What happened

Shares of supply company WW Grainger Inc (NYSE: GWW) jumped as much as 12.1% in trading Wednesday after the company announced second-quarter 2018 results. At 2:55 p.m. EDT, shares were holding gains, up 10.1% on the day.

So what

Quarterly revenue was up 9.4%, to $2.86 billion, and net income was up 142%, to $237 million, or $4.16 per share. Analysts were only expecting $3.44 per share in earnings, so this was a huge earnings beat.

Worker managing warehouse inventory.

Image source: Getty Images.

The bigger shocker was that management increased the bottom end of 2018 sales guidance to $11.0 billion, with the top end staying at $11.3 billion. Better yet, earnings-per-share guidance was increased from $14.30 to $15.30 per share to a range of $15.05 to $16.05 per share.

Now what

Management said that large- and medium-sized business customers are driving the company's growth and operating leverage is helping profitability. The leverage will continue throughout the year, which is why earnings guidance was up significantly.

A strong business environment continues to be a tailwind for WW Grainger. As long as the economy continues to hum along, the company should be a great stock for investors .

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Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

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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