A rebound in manufacturing continues to benefit Fastenal Co., which on Tuesday reported healthy gains in earnings and revenue for the first quarter.
The Winona-based seller of fasteners, nuts, bolts and other industrial and construction supplies posted a 59 percent increase in earnings to $69.2 million, or 47 cents a share. Sales rose 20 percent to $571.2 million for the quarter ended June 30.
Analysts surveyed by Thomson Reuters had estimated earnings per share of 44 cents and $569.7 million in revenue.
Fastenal shares fell more than 4 percent to close at $50.44 a share. The stock, which was trading in the low $30s a year ago, has been moving down in recent weeks after hitting a 12-month high of $56.48 early in May. Volume on Tuesday was more than twice the recent daily average, with about 3.8 million shares changing hands.
The company said sales to manufacturing customers, which account for about half of its business, increased about 30 percent in the quarter. It was the second consecutive quarterly gain for the manufacturing sector, which was down almost 19 percent last year.
Sales to nonresidential construction customers, which typically account for 20 to 25 percent of total revenue, continued to be weak. They edged up 0.5 percent in the second quarter after falling nearly 15 percent in the first quarter and declining more than 19 percent for all of 2009.
In a conference call with analysts, CEO Willard Oberton said most of Fastenal's nonresidential business is coming from energy-related construction projects, such as power plants and refineries. Oberton said other commercial construction activity is still severely depressed, especially the big-box retail market. "That business is nonexistent today," he said.
The company did not offer specific earnings or sales guidance for the second half of 2010. Oberton said Fastenal opened 45 stores in the first half of the year and expects to open 80 to 95 more in the second half of the year.
