Here's Something to Cheer in the Early Earnings Innings
Fastenal, one of the first industrials to report, did just fine. How much comfort should that give investors about the rest of the sector?
A fist bump for Fastenal.
Photographer: Bob Levey/Getty Images North AmericaFastenal Co.’s first-quarter earnings report was notable for what it wasn’t: it wasn’t alarming. None of its key numbers fell notably short of estimates and signs of gloom and doom were conspicuously absent.
The company, a distributor of factory-floor basics, earned 68 cents per share in the first three months of the year, a penny higher than analysts had estimated. Net revenue of $1.31 billion for the quarter matched analysts’ consensus. Most importantly, in a sector that’s seen profits squeezed from higher costs, increased spending and incursions from Amazon.com Inc, Fastenal’s gross margin showed signs of stabilizing. Compared to the fourth quarter, it held flat at about 47.7 percent. If this trend holds, it would be a welcome change. Fastenal shares surged more than 5 percent on the news.