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Grainger - GWW - Record performance in the quarter

4/17/2012 12:30:14 PM

Grainger (NYSE: GWW) reported record results for the 2012 first quarter ended March 31, 2012. Sales of $2.2 billion were up 16 percent versus $1.9 billion in the first quarter of 2011. There were 64 selling days in the quarter, the same as in 2011. Net earnings for the quarter increased 19 percent to $188 million versus $158 million in 2011. Earnings per share of $2.57 increased 18 percent versus $2.18 in 2011.

"Our record performance in the quarter is further evidence that we are realizing the benefits of our growth initiatives," said Chairman, President and Chief Executive Officer Jim Ryan.

"We continued to aggressively invest in growing the business through product line expansion, sales force expansion, eCommerce, inventory management services and international expansion. Best of all, more customers are choosing Grainger as their first choice when it comes to keeping their facilities functioning, safe and efficient."

Raises 2012 EPS Guidance to $10.40 to $10.80

Quarterly Highlights
- Sales of $2.2 billion, up 16 percent
- Operating earnings of $304 million, up 16 percent
- EPS of $2.57, up 18 percent
- Pretax ROIC of 31.8 percent (35.6 excluding Fabory) versus 33.8 percent in Q1 2011

"Given the opportunity in the MRO market, coupled with continued investments in our proven growth drivers, we remain confident in our strategy and the prospects for future growth. We also expect to generate better earnings leverage as the year progresses. As such, we are increasing our 2012 guidance to reflect 12 to 14 percent sales growth and earnings per share of $10.40 to $10.80." The company's previous guidance for 2012 was 10 to 14 percent sales growth and earnings per share of $9.90 to $10.65, as communicated in Grainger's fourth quarter 2011 earnings release on January 25, 2012.

The company has two reportable business segments, the United States and Canada, which represented approximately 89 percent of company sales for the quarter. The remaining operating units (Asia, Europe, and Latin America) are included in Other Businesses and are not reportable segments. Results from AnFreixo S.A., the Brazilian MRO business Grainger acquired in early April, will be included in the Other Businesses beginning in the second quarter.

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