Grainger Slumps as Industrial Outlook Weighs on Forecastby
W.W. Grainger Inc., the largest U.S. industrial supplies distributor, slumped the most in three weeks after forecasting 2016 profit that may fall short of analysts’ estimates.
Earnings for the coming year will be $10.80 to $13 a share, the company said Thursday at its annual presentation for analysts. The midpoint of that range trailed the $12 average of estimates compiled by Bloomberg. Sales will be in a range of down 1 percent to a gain of as much as 7 percent, Grainger said.
“It’s a complex time for the industry,” Grainger said in the presentation. The company is grappling with a “tough industrial economy” and expects “more of the same” in 2016.
Even with U.S. unemployment falling in October to the lowest since 2008, manufacturing and energy have been economic weak spots because of lower crude prices and a strong dollar. The industrial slowdown in the U.S. and China is starting to crimp suppliers such as Grainger and Rockwell Automation Inc, a maker of factory-efficiency software.
Grainger slumped 5.4 percent, the most since Oct. 16, to $199.83 at the close in New York, leaving the shares of the Lake Forest, Illinois-based company down 22 percent this year. The slide was the most among 66 companies in the Standard & Poor’s 500 Industrials Index.