Fastenal posts steady quarter on improving industrial demand

Fastenal Company +0.61%

Fastenal Company

FAST

44.67

+0.61%

- Industrial supplies distributor Fastenal FAST.O on Monday reported quarterly net income below Wall Street estimates, while revenue was in line with expectations, on stronger pricing and steady demand for its fasteners from manufacturing customers.

Shares of the company, which sells construction supplies such as nuts, screws, bolts, and fasteners fell 4% in premarket trading.

Tariffs imposed by U.S. President Donald Trump and geopolitical uncertainty have disrupted global supply chains, forcing companies to hike prices.

Although the resulting economic uncertainty and higher costs have weighed on industrial demand, Fastenal said it has benefited from higher pricing and a greater focus on larger, more profitable customers.

The company said higher product prices lifted first-quarter net sales by about 350 basis points, compared with little impact a year earlier.

Fastenal has also shifted focus to clients with monthly sales potential of above $50,000, which it said have lower gross margins but still contribute positively to operating margin.

The company's net income of $339.8 million was below analysts' average estimate of $343.7 million, according to data compiled by LSEG.

Fastenal's profit rose to 30 cents per share in the quarter ended March 31, up from 26 cents per share a year ago. Analysts, on an average, expected adjusted profit of 30 cents per share.

The industrial parts supplier's revenue for the January-March period rose to $2.2 billion, up 12.4% from $2 billion a year ago. This was also in line with analysts' expectation of $2.2 billion.