Strong Fastenal Results Impress Wall Street
Strong Fastenal Results Impress Wall Street
Jason Sandefur
Fastenal reported sales climbed 17% to $625.03 million during the third quarter of 2008, while net earnings grew 17.3% to $72.9 million. Q3 results also included a $10 million wage dispute settlement.
Sales during the first nine months of 2008 increased 16.4% to $1.79 billion, with net earnings jumping 23% to $217.2 million. During the first three quarters Fastenal opened 140 new stores and ended the period with 13,417 employees, an increase of 11.7% from the end of 2007.
“Rising fuel prices negatively impacted … the first nine months of 2008,” the company noted. Fuel costs jumped 48% to a total vehicle fuel cost average of $3.7 million in the two most recent quarters.
“The ability of Fastenal Co., which makes industrial fasteners, to not only earn a profit in the current economic downturn but actually improve profitability is turning heads on Wall Street,” the Associated Press reports.
“We have been consistently impressed with management’s ability to drive gross margin expansion in the current environment,” stated Morgan Keegan analyst Brent Rakers.
Rakers credited the company’s strength to its outside sales program and margin discipline. “Additionally, Fastenal continues to pursue more profitable business from their smaller customers, seek improved sourcing, and benefit from higher product availability (tied to their Indianapolis distribution center),” he added.
Rakers lauded Fastenal’s “strong operating results and in-place cost controls over the next several quarters.” Web: fastenal.com �2008 FastenerNews.com
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