Fastenal Reports In-Line Q3 Results

In a recent report from Morgan Keegan, Fastenal FAST reported in-line Q3 earnings of $0.51; consensus was $0.50. Morgan Keegan believes anomalies within bad debt expense and higher utilities costs produced the “miss” versus its view. Gross margins were disappointing at 51.78% versus Morgan Keegan's estimate of 52.25%, and declined sequentially from Q2:10. It believes unfavorable customer and product mix contributed to the shortfall. Morgan Keegan is only fractionally lowering its Street high 2010 and 2011 forecasts from $1.85 to $1.84 and from $2.26 to 2.25, respectively. Modestly lower gross margin assumptions have largely been offset by higher revenues and more favorable operating cost trends. Morgan Keegan has an Outperform rating and $61 PT on FAST FAST is trading higher at $52.83