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Grainger (GWW) Beats Q3 Earnings While Sales Lag


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.

Even though Grainger will benefit from acquisitions, focus on restructuring and growth in its eCommerce channel, its results continue to bear the brunt of unfavorable foreign currency translation, sluggish industrial markets as well as the deteriorating macroeconomic environment in Canada. Given the deflationary environment, the company remains cautious on gross margins. Moreover, weakening monthly sales and lower oil and gas prices will weigh on third-quarter 2016 results.

Let’s have a quick look on Grainger’s third-quarter release.

Estimate Trend & Surprise History

Investors should note that the earnings estimate for Grainger for the third quarter has been revised upward over the past month. Coming to the earnings surprise history, Grainger beat the Zacks Consensus Estimate in two out of the trailing four quarters with an average positive earnings surprise of around 3.14%.

GRAINGER W W Price and EPS Surprise

GRAINGER W W Price and EPS Surprise | GRAINGER W W Quote


Grainger posted adjusted earnings of $3.06 per share in the third-quarter of 2016. Earnings beat the Zacks Consensus Estimate of $3.02. Investors should note that these figures take out special items. The company’s efforts to effectively manage costs in the current low growth environment led to the 1% year-over-year improvement in earnings.


Grainger posted revenues of $2,596 million, which fell marginally short of the Zacks Consensus Estimate for revenues of $2,600 million.

Key Stats To Note

Grainger revised its sales growth guidance to 1.5% to 2.5% for fiscal 2016 and earnings per share to $11.40 to $11.70. The guidance has been lowered from the prior projection of sales growth of 1 to 4% and earnings per share of $11.20 to $12.20 to reflect weak demand in the fourth quarter.

Zacks Rank

Currently, Grainger has a Zacks Rank #3 (Hold), 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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