Spring is finally here, and a new earnings season is right around the corner. On Wednesday, Fastenal (NASDAQ:FAST) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Fastenal sells fasteners and other supplies both to corporate customers in the industrial and construction businesses at the wholesale level and to ordinary retail customers directly. As such, Fastenal is reliant on the health of the overall economy for its own growth. Let's take an early look at what's been happening with Fastenal over the past quarter and what we're likely to see in its quarterly report on Wednesday.

Stats on Fastenal

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$815.1 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Can Fastenal get connected with higher profits this quarter?
Analysts have gotten a little more pessimistic about Fastenal's earnings prospects in recent months, as they've cut $0.02 per share off their calls both for the just-ended quarter and for the full 2013 year. The stock has managed a modest gain of more than 5% since the beginning of the year.

The main concern that Fastenal has faced lately is the volatile sentiment in the manufacturing industry. Although the latest economic data argues for continued expansion in manufacturing, the pace of growth is decelerating, reflecting concerns that a new recession may be around the corner. If business activity in general falls, then Fastenal would be hit hard as well because of its reliance on other businesses for its growth.

But Fastenal has been an innovator in one of the most interesting trends in the business. Fastenal pioneered the rise in industrial vending machines, and even though rivals W.W. Grainger (NYSE:GWW) and MSC Industrial Direct (NYSE:MSM) have all jumped onto the trend, Fastenal's first-mover advantage has given it more than 21,000 machines installed at its customers' business locations. The machines make getting supplies like hardware and safety products more convenient for buyers and helps businesses monitor supply use more efficiently to ensure less waste or theft, and they also make it simpler for Fastenal and its peers to retain their most valuable clients.

In its quarterly report, watch for Fastenal to discuss MSC Industrial's planned acquisition of the distribution business of industrial service provider Barnes Group. With the $550 million deal expected to add to MSC's earnings by next year, Fastenal may need to ramp up its own acquisition strategy in order to keep pace.

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