Fastenal Co., a supplier of industrial and construction materials, remained on the front lines of the global recession Monday as it reported earnings that fell 43 percent to $43.5 million.

CEO Willard Oberton characterized the second quarter results as "very disappointing."

Earnings dropped from 51 cents a share in the second quarter of 2008 to 29 cents. The Winona-based company missed Wall Street analysts' earnings expectations by 4 cents per share.

Oberton said company executives thought they'd see some improvement in economic activity in the spring quarter, but he told analysts "the economy just continued to deteriorate."

Sales fell 21 percent in the quarter to $474.9 million.

Its stock price dipped to $29.25 in morning trading but rallied in the afternoon and closed at $31.53 a share, down less than 1 percent.

Fastenal had been on a fast track until this year. In April, Fastenal reported its first quarterly sales decline since going public in 1987.

But the recession has not been kind to Fastenal, which historically generates about half of its revenue from the manufacturing sector that is among the hardest hit in the current economic slowdown.

Fastenal has cut its workforce by 8.5 percent since the end of last year, and it has slowed the growth of new store openings.

Fastenal executives said they've seen some improvement in sales to manufacturers in May and June, explaining that it was the "first sequential improvement since September." But they said that the positive sign was offset by continued weakening in Fastenal's nonresidential construction business.

Liz Fedor • 612-673-7709