Industrial spray maker Graco handily beat Wall Street expectations with record third-quarter profits that jumped nearly 40 percent.
"For the third consecutive quarter, Graco posted double-digit sales growth on an organic, constant currency basis, achieving a new company sales records for both the quarter and year to date," said CEO Patrick McHale in a call with analysts Thursday. "This also marks the third consecutive quarter where we've achieved growth in every region and reportable segment."
Overall sales rose 16 percent to $380 million, while profits rose 39 percent to $75.5 million, or $1.30 a share, during the quarter ended Sept. 30.
Excluding one-time items, adjusted profits rose 21 percent to $1.15, on average nine cents higher than analysts expected.
The uptick followed improvements seen in previous quarters this year, signaling that doldrums endured by Graco and rest of the global industrial sector in 2016 appear to be over.
"Overall company profitability trends remained solid in the third quarter, similar to the first half-year results," McHale said.
Wall Street was pleased with the performance. CFRA Research upgraded its rating of Graco's stock Thursday from "buy" to "hold" and raised its earnings and stock price forecasts.
"Graco is proving worthy of a premium valuation, given a strong and improving outlook for significant double-digit sales and earnings growth," said CFRA equity analyst Matthew Miller in a research note.
