(RTTNews) - W.W. Grainger Inc. (GWW: News ), a supplier of facilities maintenance products, is scheduled to post its third-quarter earnings before the market opens today. On average, 15 analysts surveyed by Thomson Reuters expect the company to post earnings of $1.34 per share for the quarter, with estimates ranging between $1.23 and $1.45 per share. Analysts' estimates typically exclude special items. Sales for the quarter are estimated to be $1.60 billion, representing a 13.1% decline from last year.

In the same quarter a year ago, the Lake Forest, Illinois-based company had recorded earnings of $1.79 per share, on sales of $1.84 billion.

Recently, the company reported a 13% decline in daily sales for the month of August, and 14% in July, mainly hurt by weak demand across all customer end-markets and geographies. In both months, foreign exchange negatively affected sales by approximately 1 percentage point. By segment, August daily sales in the United States declined 14%, while sales in Canada fell 8%, or 5% in local currency. Sales for other businesses grew 16%. In July, Canada daily sales fell 19%, and the drop was 10% in local currency.

In an October 12 research note, Credit Suisse said that it believes Grainger's third-quarter earnings on October 14 would likely surprise to the upside combined with the annual analyst day on November 18, when Grainger would likely lay out its strategic plan. The analyst day will include 2010 guidance and long term margin targets, which the brokerage believes will come in higher than expectations.
Credit Suisse also upgraded its rating on Grainger shares to 'Outperform' from 'Neutral' and increased its price target to $112 from $85. Analyst Mazari said that his upgrade reflects a more attractive risk/reward versus peers, combined with what he believes to be faster top-line growth than the market expects based on his proprietary distribution sales index model. Certain supply chain initiatives, product sku, and market expansion should also drive higher margins over the next couple of years.

While announcing the second quarter results back in July, Jim Ryan, Chairman and Chief Executive Officer of Grainger, had said, "We continue to focus on the things we can control, and we're selectively investing for growth. Businesses and institutions still need to repair and maintain their facilities in this difficult economy. Our multi-channel business model and our exceptionally high service levels allow us to serve our customers well even in these tough times. We have not seen an indication of an economic turnaround at this point but our results indicate that we are gaining market share during this recession. We are in a great position to grow when the economy eventually recovers."

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