S&P 500 component Fastenal delivered mixed results Thursday with better-than-expected earnings and slightly below-target revenue. FAST stock surged past a buy point.
Fastenal reported third-quarter earnings up 4% to 52 cents per share while revenue increased nearly 3% to $1.845 billion. Wall Street forecast EPS of 50 cents with sales of $1.846. The company attributed the beat to higher unit sales at newer on-site locations.
The S&P 500 component is an industrial supplies company and the largest fastener distributor in North America. The Minnesota-based company sells fasteners, safety supplies along with tools, janitorial supplies and other products.
Fastenal stock surged 7.5% to 60.22 Thursday during market action. The move sent the S&P 500 stock above a flat base entry at 59.43, according to MarketSmith.
Fastenal announced Thursday that Q3 fastener sales represented 32.1% of its third-quarter revenue, down from 34.1% in Q3 2022. Meanwhile, its safety supplies segment made up 21.4% of Q3 sales, up from 20.5% in 2022.
Fasteners are more heavily oriented toward production of goods than toward maintenance. This results in greater susceptibility when manufacturing end markets weaken, Fastenal management said Thursday. Pricing for fasteners decelerated at a faster pace than non-fastener products during the quarter, the company said.
Incremental price increases over the past twelve months "have been of modest scope, resulting in mostly stable price levels through the third quarter of 2023," the company said in its earnings release.
For the full year, analysts project EPS up more than 5% to $1.99 with sales also rising around 5% to $7.34 billion. Fastenal's main customers tend to be in manufacturing and nonresidential construction. Meanwhile, the U.S. is in the midst of a new manufacturing plants boom, with spending around a 60-year high when adjusted for inflation.
The S&P 500 stock has a 88 Composite Rating out of a best-possible 99. FAST has an 81 Relative Strength Rating and its EPS Rating is 87.
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