Grainger posts 3% profit gain
Grainger report first quarter sales of $1.7 billion, up 14% versus first quarter 2009.
Net earnings for the quarter increased 3% to $99 million versus $96 million in 2009. Earnings per share increased 5% to $1.31 versus $1.25 for the first quarter 2009.
"Despite some economic uncertainty expected in the second half of the year, we expect to deliver strong results for the remainder of 2010. We plan to increase our market leadership position by providing our customers the broadest product offering and world-class customer service to help them operate their facilities more efficiently," said chairman, president and CEO Jim Ryan.
Ryan said the company anticipates 2010 sales growth of 9% to 12%.
Sales for the United States segment increased 8% in the 2010 first quarter. Also contributing to segment performance in the quarter was the benefit of the integration of Lab Safety Supply and Grainger Industrial Supply, which generated $65 million of additional revenue and $31 million of cost savings from the beginning of 2009 to the end of the 2010 first quarter. The company expects to deliver $70-$100 million in incremental revenue by mid year and has already exceeded the $20-$30 million cost savings target.
The U.S. business closed nine branches in the quarter. That brings the total to 20 including the 11 in the fourth quarter of 2009. The company expects these actions to contribute a $4-$10 million benefit in 2010, excluding one-time closing costs.
In Canada, sales for the Acklands-Grainger business in the quarter were up 35% in U.S. dollars versus the 2009 first quarter. In local currency, sales were up 13% for the quarter.
Sales in Canada benefited from a growing Canadian economy with particular strength in the oil and gas, agriculture and mining, utilities and forestry sectors, partially offset by weaker sales to the government.
Sales for the other businesses, which include Japan, Mexico, India, Puerto Rico, China and Panama, were up 259% versus prior year, due primarily to the new consolidation of sales for Japan and India, along with strong growth in Mexico and China.
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