Fastenal Co. reported a 7.5 percent jump in second-quarter profit despite being hamstrung by fewer orders from oil and gas customers.
The Winona-based retailer and wholesaler of nuts, bolts and other industrial and construction supplies, said it earned $140 million, or 48 cents a share, a penny better than analysts' expectations.
Revenue rose 5 percent to $997 million, which was slightly below expectations of $1 billion. Company officials acknowledged woes in the energy sector woes and said that negative currency translations between the U.S. and Canada snipped sales by about 1 percent.
Fastenal's stock price fell $1.71, or 4 percent, on Tuesday to close at $41.11.
The first six months of 2015 "were hit hard by a slowdown in our business with customers connected to the oil and gas industry," said Fastenal CEO LeLand Hein Jr. in a statement. This connection includes direct industry participants as well as those with a geographic connection. That's the bad news. The good news is that we believe there are signs of stabilization in the last few months."
Company executives credited the overall growth during the quarter to Fastenal's rapidly growing sales force and cost containment.
Fastenal said its industrial supply business and non-fastener products grew, while expenses were tightly managed. The combination helped overcome declines from energy customers.
Fastenal has added more than 1,392 employees in the past year and now boasts 13,203 employees in stores nationwide. The company also continued its push to sell products via industrial vending machines that are placed inside customer factories. It installed 5,144 new vending machines during the quarter and now has 50,620 machines out in the field.