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Grainger (GWW) Set to Report Q4 Earnings: What's in Store?

W.W. Grainger, Inc. GWW is scheduled to report fourth-quarter 2022 results on Feb 2, before the opening bell.

Q4 Estimates

The Zacks Consensus Estimate for GWW’s fourth-quarter revenues is pegged at $3.76 billion, indicating growth of 12% from the year-ago quarter’s reported figure. The consensus mark for earnings per share is pegged at $6.97, suggesting an improvement of 28.1% from the prior-year quarter. Earnings estimates have moved up 0.4% in the past 60 days.

Q3 Results

In the last reported quarter, Grainger’s earnings and revenues beat the Zacks Consensus Estimate and increased year over year. The company surpassed earnings estimates in all of the last four quarters. GWW has a trailing four-quarter positive earnings surprise of 10.1%, on average.

W.W. Grainger, Inc. Price and EPS Surprise

 

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W.W. Grainger, Inc. price-eps-surprise | W.W. Grainger, Inc. Quote

What the Zacks Model Indicates

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. However, that’s not the case here.

Earnings ESP: Grainger has an Earnings ESP of -0.12%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors to Note

Grainger has been witnessing strong growth in core and non-pandemic product sales for the past few quarters. The company’s product mix has been stabilizing, as customers have been returning to normal operations post-pandemic. Also, GWW is focused on improving the end-to-end customer experience by making investments in its e-commerce and digital capabilities, and executing improvement initiatives within its supply chain. These factors are likely to have contributed to the company’s fourth-quarter performance.

Grainger’s High-Touch Solutions North America segment is expected to have benefited from strength in commercial, transportation and heavy manufacturing, strong revenue growth across the company’s North American regions, and an expansion in large and midsize customers. The Zacks Consensus Estimate for the segment’s revenue is pinned at $3,004 million, up 14.3% from the 2021 reported level.

Grainger has been witnessing market-beating growth in the High-Touch Solutions market compared with the U.S. MRO (maintenance, repair and operating) market. The upside can be attributed to strategic activities, such as building advantaged MRO solutions, delivering unparalleled customer services and offering differentiated sales and services.

GWW’s Endless Assortment segment is likely to have benefited from strong customer acquisition and repeat business in the quarter to be reported. Customer growth at MonotaRO is expected to have positively impacted the segment’s revenues. The Zacks Consensus Estimate for the segment’s revenues is pegged at $689 million, up 3.9% from the prior-year quarter’s reported figure.

The company has been witnessing elevated material and freight costs for some time. This, coupled with higher operating costs and incremental SG&A expenses due to higher technology investments, is likely to have impacted its margins in the fourth quarter. However, its pricing actions are anticipated to have offset some of the negative impacts.

Price Performance

Grainger shares have improved 15.5% in a year against the industry’s decline of 10.4%.

 

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Stocks Poised to Beat Earnings Estimates

Here are some Industrial Products stocks, which, according to our model, have the right combination of elements to post an earnings beat in their upcoming releases:

Deere & Co. DE currently has an Earnings ESP of +2.30% and a Zacks Rank #2. The Zacks Consensus Estimate for DE’s first-quarter fiscal 2023 earnings has moved 1.5% north in the past 60 days and is pegged at $5.51 per share. The consensus mark suggests year-over-year growth of 88.7%

The Zacks Consensus Estimate for DE’s quarterly revenues is pegged at $11.4 billion, indicating growth of 33.9% from the prior-year quarter’s reported level. DE has a trailing four-quarter earnings surprise of 7.1%, on average.

Xylem Inc. XYL currently has an Earnings ESP of +0.63% and a Zacks Rank #3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings has been unchanged in the past 60 days and is pegged at 79 cents per share. This suggests year-over-year growth of 25.4%

The Zacks Consensus Estimate for XYL’s quarterly revenues is pegged at $1.4 billion, indicating year-over-year growth of 6.1%. XYL has a trailing four-quarter earnings surprise of 13.3%, on average.

Illinois Tool Works Inc. ITW currently has an Earnings ESP of +1.92% and a Zacks Rank #3. The Zacks Consensus Estimate for fourth-quarter 2022 earnings has increased 0.4% in the past 60 days and is pegged at $2.61 per share. This suggests year-over-year growth of 33.8%

The Zacks Consensus Estimate for quarterly revenues is pegged at $3.9 billion, indicating growth of 5.3% from the prior-year quarter’s reported level. ITW has a trailing four-quarter earnings surprise of 4.2%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Illinois Tool Works Inc. (ITW) : Free Stock Analysis Report

Deere & Company (DE) : Free Stock Analysis Report

W.W. Grainger, Inc. (GWW) : Free Stock Analysis Report

Xylem Inc. (XYL) : Free Stock Analysis Report

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