NEW YORK (TheStreet) -- W.W. Grainger (GWW - Get Report) had a strong first quarter performance, according to the earnings report filed today.
The maintenance, repair and operating supplies distributor posted a first quarter EPS of $3.07, a 4% year over year quarterly increase. Analysts consensus EPS estimate for the quarter was $2.96.
Revenue for the quarter was up 4.6% to 2.37 billion, narrowly missing Thomson Reuters analysts consensus estimates of $2.393 billion in revenue.
The company kept its yearly guidance in-line with previous estimates with a range of $9.9 billion to $10.29 billion in sales, and a full year EPS estimate range of $12.10 to $12.85.
TheStreet Ratings team rates GRAINGER (W W) INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate GRAINGER (W W) INC (GWW) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, increase in stock price during the past year and growth in earnings per share. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GWW's revenue growth has slightly outpaced the industry average of 6.7%. Since the same quarter one year prior, revenues slightly increased by 6.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- GWW's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.28, which illustrates the ability to avoid short-term cash problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Trading Companies & Distributors industry and the overall market, GRAINGER (W W) INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- GRAINGER (W W) INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, GRAINGER (W W) INC increased its bottom line by earning $11.12 versus $9.52 in the prior year. This year, the market expects an improvement in earnings ($12.62 versus $11.12).
- You can view the full analysis from the report here: GWW Ratings Report