UPDATE: Grainger Posts Drop In Q2 Profit, Narrows 2014 Forecast

W.W. Grainger

reported a drop in its fiscal second-quarter earnings. Grainger now projects 2014 earnings of $12.20 to $12.60 per share, versus its earlier forecast of $12.10 to $12.85 per share. It now projects sales to rise 5% to 7% over the year, versus its previous growth forecast of 5% to 9%. The Lake Forest, Illinois-based company reported a quarterly profit of $205.9 million profit, or $2.94 per share, down 5% from a year-ago profit of $217.7 million, or $3.03 per share. Excluding certain items, EPS rose 2% to $3.09. Its revenue climbed 5% to $2.51 billion. However, analysts were projecting earnings of $3.09 per share on revenue of $2.54 billion. The company's gross profit margin fell 0.9 percentage point to 43.1%. Grainger's sales in the US increased 7% to $1.99 billion, while sales in Canada dropped 9% in US dollars. Sales for the Other Businesses jumped 14% y/y. Chairman, President and Chief Executive Officer Jim Ryan said, "We continue to be pleased with the performance of our U.S. business, including our three most recent acquisitions. The investments we are making in growth and infrastructure continue to drive share gain, particularly among our large, more complex customers who have fully embraced our value proposition." Grainger shares fell 0.39% to close at $244.88 yesterday.