Fastenal Co. just missed Wall Street expectations in the fourth quarter, earning 33 cents a share compared with the 34 cents analysts were expecting.
The results came after Fastenal warned last month that it would miss fourth-quarter earnings expectations because of weak sales, increased employee costs and lower-than-expected gross margins.
"This weakening was worse than we expected, and this created additional drain on our ability to grow earnings," the company said Wednesday in a statement. Weakening sales were accompanied by lower gross profit margins, it said.
Fastenal shares fell 4.5 percent to $46.06 on the Nasdaq Stock Market, the biggest drop in the S&P 500 on Wednesday.
Fourth-quarter earnings rose half a percent to $99.2 million, said the Winona, Minn.-based firm, which sells safety supplies and nuts, bolts and other fasteners to construction and manufacturing firms through retail stores and industrial vending machines.
Revenue rose 7.5 percent to $813.8 million, slightly above the $813.3 million Wall Street had expected.
The decline in fourth-quarter gross margins was largely driven by lower use of the firm's trucking network, lower supplier incentives, product mix and competition, Fastenal said.
For the year, Fastenal earned $1.51 per share, almost the $1.52 per share that Wall Street had expected, on revenue of $3.3 billion, even with analysts' expectations.
