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UPDATE 2-Graco Q1 results beat Street as demand returns
April 21, 2010 / 9:24 PM / 8 years ago

UPDATE 2-Graco Q1 results beat Street as demand returns

* Q1 EPS $0.34 vs est $0.25

* Q1 sales $164.7 mln vs est $146.1 mln (Recasts, adds analyst comments, updates shr movement)

By Biswarup Gooptu

BANGALORE, April 21 (Reuters) - Graco Inc (GGG.N), a maker of fluid handling systems and components, posted a quarterly profit that beat Wall Street expectations, driven largely by increased sales across its segments.

The company’s industrial segment saw a 29 percent increase in quarterly sales to $97 million, as it continued to benefit from the gradual stabilization of the global industrial markets.

“Last year, this quarter was amongst worst performances ... (this time the) improvement was across the board,” Morningstar analyst Anil Daka said by phone.

The company, which has a significant exposure to the construction and automotive markets, also saw an upswing in its contractor and lubrication businesses, which rose 7 percent and 13 percent year-over-year.

While non-residential construction is still struggling under tepid demand and frozen markets, housing starts have seen an uptick, to touch their highest levels since November 2008.

“Graco is on the top of its end-markets. When you talk to a Graco product user, the company beats its competition by a mile,” Daka said.

For the first-quarter ended March 26, the company reported net income of $20.6 million, or 34 cents a share, compared with $2.8 million, or 5 cents a share, a year ago.

Sales rose almost 20 percent to $164.7 million, with revenue from its Asia Pacific and European regions up 65 percent and 17 percent, respectively.

“Things are definitely going in the right direction. I think Graco is in for a very good ride as far as the fundamentals are concerned,” Daka said.

Analysts on average were expecting Graco to earn 25 cents a share, on revenue of $146.1 million, according to Thomson Reuters I/B/E/S.

Shares of the Minneapolis, Minnesota-based company closed at $32.23 Wednesday on the New York Stock Exchange. (Reporting by Biswarup Gooptu in Bangalore; Editing by Ratul Ray Chaudhuri)

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