Fastenal (FAST +16.8%) soars to all-time highs on heavy volume and helps lift the entire industrials sector (XLI +2.6%), as investors rethought their expectations for an ugly batch of Q3 industrial earnings.
FAST unofficially kicked off industrial earnings season, and the company's Q3 results were better than analysts had forecast on all major fronts, including overall revenue and gross margin.
In FAST's earnings conference call, CEO Daniel Florness said Q3's growth in product sales was a "tremendous accomplishment" in an economy "where things have weakened."
But even FAST's better than expected results show the manufacturing slowdown is real and deepening, says Bloomberg's Brooke Sutherland; while the company's daily sales grew 5.8% in September, that is a deceleration from August and July and the weakest monthly pace since January 2017.
FAST also noted that because of slower economic activity, customers are delaying orders for its vending machines that dispense industrial parts, lengthening the sales cycle; it now expects to sign customers up for ~22K vending machines in 2019, down from its previous goal of 23K-25K.
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