Why Fastenal (FAST) is Plunging Today

NEW YORK (TheStreet) -- Fastenal (FAST) tumbled early on Wednesday after reporting fourth-quarter and full-year financials. Shortly after market open, shares had taken off 6.4% to $45.12.

The industrial machinery wholesaler reported net income for the fourth-quarter ended December of 33 cents a share, missing Yahoo! Finance consensus by a penny. Revenue of $813.76 million was in line with expectations and 7.5% higher than the year-ago quarter.

For fiscal 2013, the company reported net income of $1.51 a share. Revenue of $3.33 billion was 6.1% higher than a year earlier. Again, the results missed earnings expectations by a penny, but revenue came in as expected.

In December, the company issued a press release warning of weakening sales and gross margin trends.

"This weakening was worse than we expected and this created additional drain on our ability to grow earnings. We did grow our net earnings in the fourth quarter of 2013, but we are disappointed our net earnings per share did not grow," the company said in a statement on Wednesday.

The Winona, Minn.-based business said gross margin slid outside the expected 51% to 53% range over the fourth quarter, due to lower utilization of its trucking network, supplier incentives aligned with the end-of-year calendar, its product mix and a competitive marketplace.

"The last two factors require external and internal improvements. We are actively working on the internal component and are positioning our business to take advantage of improvements in the industrial economy, but the timing is uncertain. Despite this, we continue to believe the 51% to 53% range is appropriate for our business given our end market and product mix," the company noted.

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