Maintenance supplies distributor W.W. Grainger Inc. (GWW) Tuesday reported an increase in first-quarter profit, reflecting higher revenues and improved margins. Earnings per share beat analysts' estimates, while revenues missed view.
The company also raised the low end of its sales and earnings guidance for the full year to reflect the quarterly performance. The shares rose about 7 percent in the morning trade.
Jim Ryan, chairman, president and chief executive officer of the company said, "Over the balance of the year, we will invest in eCommerce, our sales force, our distribution center network and our enterprise systems that will provide value to our customers and help us gain additional market share longer term."
In the first quarter, net earnings available to shareholders increased to $208.24 million or $2.94 per share from $184.22 million or $2.57 per share in the previous year. On average, 19 analysts polled by Thomson Reuters expected the company to earn $2.74 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter grew 4 percent to $2.28 billion, but came below analysts' estimate of $2.31 billion. Grainger noted that there were 63 selling days in the quarter, one less than in 2012. On a daily basis, sales for the first quarter increased 6 percent.
The United States and Canada segments represented about 89 percent of company sales for the quarter. Sales from the United States segment increased 4 percent, and was up 6 percent on a daily basis. Sales at Acklands-Grainger rose 4 percent, with 5 percent increase on a daily basis.
The company's gross profit margin increased 0.8 percentage points to 45.2 percent, mainly driven by the US segment.
For full-year 2013, the company now expects earnings per share to be in the range of $11.30 to $12.00, compared to the prior outlook of $10.85 to $12.00 per share. Sales growth is expected to be 5 to 9 percent, while the firm forecast sales growth of 3 to 9 percent in January.
Analysts expect the company to report earnings per share of $11.75, on revenue of $9.61 billion for the year.
GWW is currently trading at $240.95, up $15.25 or 6.76 percent, on a volume of 377 thousand shares.
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