Fastenal ( FAST), a distributor of construction and building supplies, missed Wall Street earnings expectations for the second straight quarter, sending its share price down 6% Monday morning.The company, obviously hurt by the recession, blamed the poor results in particular on a continued falloff in its business with manufacturing companies. Fastenal, as its name might indicate, is a wholesaler and retailer specializing in fasteners (screws, nuts, bolts, clips, etc.) for all kinds of uses. Historically, however, half of its sales have come from manufacturing and industrial customers. That business shrank 28% compared with the year-ago second quarter. Overall, the company said second-quarter earnings dropped nearly 43% to $43.5 million, or 29 cents a share, from the year-ago period, below analysts' estimates of 33 cents. Second-quarter sales, meanwhile, fell 21% to $474.9 million. Investors were not impressed. In morning trading, Fastenal stock was changing hands at $29.81, down $1.92, on a volume of 1.2 million shares. Its average daily turnover is 1.9 million. The shares reached their all-time high, 56.48, in September last year.
In the face of the recession, Fastenal also continued to trim an enormous staff that it had built up during the boom years, cutting about 270 jobs during the quarter. Fastenal has laid off almost 9% of its workforce in 2009, cutting the number to 12,470 employees from about 13,000 last year. Still, the company continues to open new stores, though at a slower rate than in the previous year. It cut the ribbon on 42 new locations in the second quarter, down from 112 in 2008's second quarter. In its premarket earnings press release Monday, Fastenal said it plans to return to its normal new-store-opening rate of 7% to 10% in January 2010, "assuming the economy remains somewhat stable."