W.W. Grainger Beats Estimates Yet Again

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W.W. Grainger (NYS: GWW) reported earnings on Jan. 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), W.W. Grainger met expectations on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue improved, and earnings per share increased.

Gross margins expanded, operating margins contracted, net margins dropped.

Revenue details
W.W. Grainger recorded revenue of $2.08 billion. The 14 analysts polled by S&P Capital IQ hoped for revenue of $2.08 billion. Sales were 14% higher than the prior-year quarter's $1.83 billion.


Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $2.13. The earnings estimates compiled by S&P Capital IQ averaged $2.12 per share on the same basis. GAAP EPS of $2.04 for Q4 were 12% higher than the prior-year quarter's $1.83 per share.


Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 43.6%, 180 basis points better than the prior-year quarter. Operating margin was 10.7%, 110 basis points worse than the prior-year quarter. Net margin was 7.1%, 10 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.12 billion. On the bottom line, the average EPS estimate is $2.43.

Next year's average estimate for revenue is $8.92 billion. The average EPS estimate is $10.39.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 211 members out of 228 rating the stock outperform, and 17 members rating it underperform. Among 93 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 87 give W.W. Grainger a green thumbs-up, and six give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on W.W. Grainger is outperform, with an average price target of $186.62.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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