Industrial and construction supplies provider Fastenal Co. (FAST) reported Thursday a 26 percent rise in first-quarter profit, reflecting a 20 percent growth in net sales. However, the bottom line number missed analysts' estimate as currency fluctuations lowered its daily sales growth rate during the quarter.
The company expects to open new stores at a rate of about 4 to 6 percent in 2012. Providing a background, Fastenal said in the first ten years of being public, between 1987 and 1997, it opened stores at a rate approaching 30 percent per year and subsequently opened stores at a rate closer to 10 to 15 percent, and, over the last five years, at a rate of nearly 3 to 8 percent.
In the first quarter, the company's net earnings increased to $100.19 million or $0.34 per share from $79.55 million or $0.27 per share in the previous year. On average, nine analysts polled by Thomson Reuters expected earnings of $0.35 per share. Such estimates typically exclude special items.
The company noted that per-share information has been adjusted to give effect to the two-for-one split of common stock in May 2011.
Net sales for the quarter grew 20 percent to $768.88 million from $640.58 million in the same quarter last year and came in line with analysts' estimate. Fastenal noted that change in currencies in foreign countries (primarily Canada) relative to the US dollar lowered its daily sales growth rate by 0.3 percent during the quarter.
The company said it experienced more pronounced growth in its industrial production business, but growth was less pronounced in the maintenance portion of its manufacturing business.
During the quarter, the company opened 28 new stores, an increase of 1.1 percent since December 31, 2011. But, the number was down compared to the 37 new stores opened in the same period of 2011. As at March 31, 2012, the company had 2,611 stores.
FAST closed Wednesday's regular trading at $49.63 on the Nasdaq. In the pre-market activity, the shares are down 2.58 percent.
by RTT Staff Writer
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