5/8/2013 2:41:00 PM
HEADLINES
STOCKS: Grainger Reports “Solid” Start To 2013
Grainger reported sales, including fasteners, increased 4% to $2.3 billion during the first quarter of 2013. Sales increased 6% on a daily basis, consisting of 3 percentage points from volume, 2 percentage points from price, 1 percentage point from acquisitions and 1 percentage point from higher sales of seasonal products, partially offset by a 1 percentage point reduction from foreign exchange.
Q1 net earnings gained 13% to $212 million and EPS rose 14% to $2.94.
Uncertainty in the U.S. surrounding sequestration contributed to a decline in sales to the government end market, which represented 15% of sales for the U.S. segment.
“We are encouraged by the solid start to the year, despite facing difficult comparisons with 2012,” stated CEO Jim Ryan.
“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,” Ryan added.
United States
Sales for the U.S. segment increased 4% to $1.77 billion, or 6% on a daily basis driven by 3 percentage points from price, 2 percentage points from volume and 1 percentage point from acquisitions. Daily sales increased 7% in January, 7% in February and 4% in March.
“The sales increase for the quarter in the United States was led by solid growth in the light and heavy manufacturing, natural resources, commercial and contractor end markets,” the company stated.
Operating earnings for the U.S. segment increased 11% to $330.8 million, driven by the 4% sales growth, higher gross profit margins and positive expense leverage.
Canada
Sales in the 2013 first quarter at Acklands-Grainger increased 4% to $283.1 million, or 5% on a daily basis, including 8 percentage points from volume, partially offset by a 2 percentage point decline from the timing of the Easter Holiday and 1 percentage point decline from foreign exchange.
“The sales increase for the quarter in Canada was led by strong growth to customers in the construction, commercial, forestry, oil and gas and light manufacturing end markets.”
Q1 operating earnings in Canada increased 11% to $32.8 million.
Other Businesses
Sales for the Other Businesses, which includes operations primarily in Asia, Europe and Latin America, increased 4% to $247.9 million, or 5% on a daily basis for Q1. The daily sales growth consisted of 6 percentage points from volume and price and 4 percentage points from acquisitions, partially offset by a 5 percentage point decline from unfavorable foreign exchange.
“The sales increase was primarily due to strong revenue growth in Japan and incremental sales from the business in Brazil acquired in April 2012.”
Operating earnings for the Other Businesses fell 23% to $8.25 million, driven by operating losses in Brazil, coupled with lower earnings in some of the smaller businesses in Asia and Latin America. The earnings decline was partially offset by strong earnings growth in Japan and operating earnings growth in Europe related to lower expenses from restructuring actions taken in the final quarter of 2012. ©2013 GlobalFastenerNews.com
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