Industrial and construction equipment supplier Fastenal FAST dropped Tuesday after it reported third-quarter revenue below estimates.
The Winona, Minnesota-based company reported third quarter revenue of $1.41 billion, a 2.5% increase, and earnings of 38 cents per share.
Analysts were expecting the company to report revenue of $1.42 billion and earnings of 37 cents per share.
The company said the increase in sales was driven primarily by higher unit sales of safety products, like personal protection equipment, hand sanitizer and related products.
However, Fastenal also said that there is continued softness in underlying business activity due to a generally weak industrial marketplace for products unrelated to protection from the coronavirus.
Fastenal said daily sales of fastener products declined 6.9% over the third quarter of 2019, and represented 30.5% of net sales in the third quarter of 2020 vs. 33.7% of net sales in the third quarter of 2019.
“The tone of the third quarter of 2020 can best be described as one of normalization following the heavily pandemic-influenced second quarter of 2020,” the company said in its statement announcing its results.
Activity levels were below those that existed prior to the onset of the coronavirus pandemic, but the company said its checks suggest that there was a gradual sequential improvement in general business activity in each month of the quarter.
Shares of Fastenal were down more than 4% to $45.70 in afternoon trading Tuesday.
In a separate announcement, Fastenal declared a 25 cent per share dividend to be paid in cash on November 24 to shareholders of record as of October 27.
The company has been paying quarterly dividends regularly since 2011. The 25 cents amount has been consistent since 2018.