Grainger Q3 Results Miss Estimates; Cuts 2015 Outlook - Quick Facts

(RTTNews) - W.W. Grainger Inc. (GWW) reported that its net earnings attributable to the company for the third quarter of 2015 declined 17 percent from last year. The company lowered its 2015 sales and earnings per share guidance.

"Our results reflect the challenging industrial economy in North America. While we remain confident about our ability to gain market share, we are expecting continued revenue deceleration given recent feedback from our customers and suppliers. A number of large customers have announced layoffs, and there are indications of extended year-end holiday shutdowns," said Chairman, President and Chief Executive Officer Jim Ryan.

Quarterly net earnings attributable to the company decreased 17 percent to $192.20 million from $230.32 million in 2014. Net earnings available to common shareholders were $190.40 million, down from $227.73 million last year. Earnings per share of $2.92 declined 12 percent versus $3.30 in 2014.

The 2015 third quarter included charges of $11.0 million, or $0.11 per share. These charges reflect cost actions begun in the third quarter related to the announcement of 26 branch closures in the United States and company restructuring, primarily related to payroll.

On an adjusted basis, earnings per share declined to $3.03 from $3.30 last year. Analysts polled by Thomson Reuters expected the company to report earnings of $3.06 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter were $2.53 billion down about 1 percent from $2.56 billion in the 2014 third quarter. Wall Street expected revenues of $2.56 billion for the quarter. There were 64 selling days in the quarter, the same as in 2014.

Given the performance to date and the expectation of continued economic weakness, the company lowered its sales and earnings per share guidance. For 2015, the company now expects sales in the range of -0.5 percent to 0.5 percent and earnings per share of $11.60 to $11.80, excluding the $0.16 per share in charges for the full year detailed at the end of the release. Wall Street currently is looking for fiscal year 2015 earnings of $ 12.07 per share on annual revenues of $10.07 billion.

The new guidance includes the benefit of the recent Cromwell Group (Holdings) Limited acquisition, which is expected to contribute approximately 1.5 percentage points of sales growth and $0.01 to $0.02 to earnings per share for the final four months of 2015. The company's previous 2015 guidance was issued on July 17, 2015, with expectations of 0 to 2 percent sales growth and earnings per share of $12.00 to $12.50 for the full year.