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Grainger (GWW) to Report Q1 Earnings: What's in the Cards?
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W.W. Grainger, Inc. (GWW - Free Report) is scheduled to report first-quarter 2020 results on Apr 23, before the opening bell.
Q1 Estimates
The Zacks Consensus Estimate for the first-quarter revenues is pegged at $2.88 billion, indicating an improvement of 3% from the year-ago quarter. The same for earnings stands at $4.42, suggesting year-over-year decline of 2%. The estimate for earnings has gone down 5% over the past 60 days.
A Sneak Peak at Q4 Results
In the last reported quarter, Grainger’s earnings declined on a year-over-year basis despite rise in revenues. While earnings missed the Zacks Consensus Estimate, revenues beat the same. Notably, the company has missed the Zacks Consensus Estimate in three of the trailing four quarters, while surpassing in one. It has a trailing four-quarter negative earnings surprise of 1.49%, on average.
Grainger has been strengthening its relationship with customers in the United States. Aided by its ongoing investments in growth initiatives, Grainger outgrew the U.S MRO (maintenance, repair and operating) market by 150-200 basis points in 2019. Notably, in the fourth quarter, the U.S. large customer business improved 3% or 350 basis points faster than the market while the U.S. midsize customer business grew 5% or approximately 550 basis points faster than the market. This momentum is likely have been impacted in first-quarter 2020 on account of current uncertainty in the U.S markets as a result of the COVID-19 pandemic.
Grainger has been focused on improving end-to-end consumer experience by making investments in e-commerce and digital capabilities, and implementing supply-chain improvement initiatives. With customers forced to stay at home due to the restrictions imposed by governments globally to stem the coronavirus spread, e-commerce sales are likely to have benefited in the quarter to be reported. However, the company caters to customers in the manufacturing and transportation industries, which have been impacted by the coronavirus outbreak. This is likely to have impacted Grainger’s first-quarter results.
The company has been concentrating on reducing cost structure in the Canada operations and managing inventory to drive growth, while also focusing on making incremental investments in marketing and merchandising. This is likely to have contributed to first-quarter performance.
Further, the first-quarter results are likely to reflect the unfavorable impact of input-cost inflation and foreign-exchange headwinds. Rising freight costs are also likely to have impacted the to-be-reported quarter’s performance. Additionally, higher operating expenses, due to investments in digital-marketing capabilities, have been concerning. This is likely to have eroded its margin performance during the period under consideration.
Price Performance
Shares of the company have fallen 3.8% in a year compared with the industry’s decline of 21.5%.
Earnings Whispers
Our proven model doesn’t conclusively predict an earnings beat for Grainger this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Grainger is -1.43%.
Zacks Rank: Grainger currently carries a Zacks Rank of 4 (Sell).
Stocks Poised to Beat Earnings Estimates
Here are a few Industrial Products stocks which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.
TPI Composites, Inc. (TPIC - Free Report) has an Earnings ESP of +74.5% and a Zacks Rank of 2. It has an estimated earnings growth rate of 20% for the first quarter.
Ball Corporation , a Zacks #3 Ranked stock, has an Earnings ESP of +1.56%.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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Grainger (GWW) to Report Q1 Earnings: What's in the Cards?
W.W. Grainger, Inc. (GWW - Free Report) is scheduled to report first-quarter 2020 results on Apr 23, before the opening bell.
Q1 Estimates
The Zacks Consensus Estimate for the first-quarter revenues is pegged at $2.88 billion, indicating an improvement of 3% from the year-ago quarter. The same for earnings stands at $4.42, suggesting year-over-year decline of 2%. The estimate for earnings has gone down 5% over the past 60 days.
A Sneak Peak at Q4 Results
In the last reported quarter, Grainger’s earnings declined on a year-over-year basis despite rise in revenues. While earnings missed the Zacks Consensus Estimate, revenues beat the same. Notably, the company has missed the Zacks Consensus Estimate in three of the trailing four quarters, while surpassing in one. It has a trailing four-quarter negative earnings surprise of 1.49%, on average.
W.W. Grainger, Inc. Price and EPS Surprise
W.W. Grainger, Inc. price-eps-surprise | W.W. Grainger, Inc. Quote
Factors at Play
Grainger has been strengthening its relationship with customers in the United States. Aided by its ongoing investments in growth initiatives, Grainger outgrew the U.S MRO (maintenance, repair and operating) market by 150-200 basis points in 2019. Notably, in the fourth quarter, the U.S. large customer business improved 3% or 350 basis points faster than the market while the U.S. midsize customer business grew 5% or approximately 550 basis points faster than the market. This momentum is likely have been impacted in first-quarter 2020 on account of current uncertainty in the U.S markets as a result of the COVID-19 pandemic.
Grainger has been focused on improving end-to-end consumer experience by making investments in e-commerce and digital capabilities, and implementing supply-chain improvement initiatives. With customers forced to stay at home due to the restrictions imposed by governments globally to stem the coronavirus spread, e-commerce sales are likely to have benefited in the quarter to be reported. However, the company caters to customers in the manufacturing and transportation industries, which have been impacted by the coronavirus outbreak. This is likely to have impacted Grainger’s first-quarter results.
The company has been concentrating on reducing cost structure in the Canada operations and managing inventory to drive growth, while also focusing on making incremental investments in marketing and merchandising. This is likely to have contributed to first-quarter performance.
Further, the first-quarter results are likely to reflect the unfavorable impact of input-cost inflation and foreign-exchange headwinds. Rising freight costs are also likely to have impacted the to-be-reported quarter’s performance. Additionally, higher operating expenses, due to investments in digital-marketing capabilities, have been concerning. This is likely to have eroded its margin performance during the period under consideration.
Price Performance
Shares of the company have fallen 3.8% in a year compared with the industry’s decline of 21.5%.
Earnings Whispers
Our proven model doesn’t conclusively predict an earnings beat for Grainger this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Grainger is -1.43%.
Zacks Rank: Grainger currently carries a Zacks Rank of 4 (Sell).
Stocks Poised to Beat Earnings Estimates
Here are a few Industrial Products stocks which you may consider as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.
Silgan Holdings Inc. (SLGN - Free Report) currently has a Zacks Rank #2 and an Earnings ESP of +0.68%. You can see the complete list of today’s Zacks #1 Rank stocks here.
TPI Composites, Inc. (TPIC - Free Report) has an Earnings ESP of +74.5% and a Zacks Rank of 2. It has an estimated earnings growth rate of 20% for the first quarter.
Ball Corporation , a Zacks #3 Ranked stock, has an Earnings ESP of +1.56%.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>