W W Grainger Posts Downbeat Q1 Earnings, Lowers Forecast

reported weaker-than-expected earnings for the first quarter and lowered its guidance for the year. Grainger now projects earnings of $12.25 to $12.95 per share on sales growth of 1 percent to 4 percent. The company had expected earnings of $12.60 to $13.60 per share on sales growth of 3 percent to 7 percent. The Lake Forest, Illinois-based company posted a quarterly profit of $211 million, versus a year-ago profit of $217 million. Its per-share earnings came in flat at $3.07. Excluding restructuring costs, the company's adjusted earnings came in at $3.10 per share. Its sales rose 2 percent to $2.44 billion. However, analysts were projecting a profit of $3.11 per share on sales of $2.46 billion. Grainger's sales in the U.S. climbed 3.9 percent to $1.97 billion, while sales in Canada rose 7.8 percent to $235 million. Operating cash flow slipped to $156 million in the first quarter, compared to $168 million in the yea-ago quarter. The company's board announced a $3 billion share buyback plan. During the first quarter, the company returned $223 million to shareholders. The average estimate among 18 Estimize users was for earnings of $3.19 per share and revenue of $2.48 billion. "This was a challenging quarter. Our results were affected by continued headwinds from the strong U.S. dollar and weakness in the oil and gas sector in North America. We remain encouraged by the growth achieved with large customers in our U.S. multichannel business and the customer acquisition strategy that is fueling our single channel online businesses," said Chairman, President and Chief Executive Officer Jim Ryan. Grainger shares gained 2.14 percent to $247.00 in pre-market trading.