MINNEAPOLIS _ After a tough 2016, Fastenal reported better than anticipated revenue for this year's first quarter.
The Winona, Minn.-based company, which makes construction and industrial supplies and fasteners, saw earnings of $134.2 million, or 46 cents a share, up 6.3 percent from the same period last year. Revenue increased 6.2 percent to $1.05 billion, the company said Wednesday. The earnings results hit the estimates of 14 analysts polled by Thomson Reuters.
"We are pleased with the improving pace of business growth in the first quarter of 2017," said Dan Florness, president and chief executive, in the company's news release. "This is a welcome sign of improving customer business activity and of the traction we are gaining in our growth drivers."
Florness has pointed out that sales and profit trends stabilized in the fourth quarter of 2016 after a year where weaknesses in the industrial sector forced the company to scrutinize its workforce and find other efficiencies. Total employment is down 687 employees since the first quarter last year. Profits were down 3 percent for the full year 2016.
Shares of Fastenal closed Wednesday down 8 percent at $46.29. Year-to-date Fastenal shares are essentially flat. Shares have traded between $37.70 and $52.74 per share over the last 52 weeks.
The company saw sales growth in its existing stores, with industrial vending machines and Onsite programs (sales depots at customer locations) driving the increases. The company now has 64,430 installed vending machines and 437 active Onsite locations.
Sales of fastener products increased grew less than 1 percent in the first quarter but sales of non-fastener products, which accounted for 64.4 percent of overall sales in the quarter, increased 9.4 percent.
On the last day of the quarter Fastenal closed on the acquisition of certain assets of Manufacturer's Supply Co., a Hudsonville, Mich.-based industrial and fastener supply distributor with about $50 million in annual sales.
On Tuesday, Fastenal also announced its board has declared a dividend of 32 cents per share to be paid on May 24, to shareholders of record on April 26.
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