W.W. Grainger (GWW) is an electronic and construction wholesale company, who will likely miss analyst estimates horribly, as it reports weak guidance and margins, as the domestic credit-led recession forces business to scale back construction and routine maintenance projects. As of 2008, W.W. Grainger’s revenue was earned in the follow segments: Material Handling represents 15 percent, Tools & Test Equipment represents 14 percent, Pumps, Plumbing and Fulid Power represents 12 percent, Safety and Security represents 12 percent, Grainger’s HVAC unit-line represents 11 percent, Cleaning & Maintenance represents 9 percent, Electrical represents 8 percent, Lighting 8 represents percent, Motors & Power Transmission represents 5 percent, and Metalworking & Shop Supplies represent 5 percent of total sales. A solid industrial company, W.W. Grainger will be negatively impacted by the downturn in non-farm payrolls, and industrial production. Recently the company fired 400 workers as a result of lower volume and the combination of Lab Safety Supply and Grainger Industrial Supply. A weakening in sales is supported by a decline of 9 percent for January’s same-store-sales, which was primarily the result of weakened demand across all customer end-markets and geographies. Moreover, February’s same-store-sales dropped 10 percent compared with February 2008, due primarily to weak demand. Since the start of March insiders have sold over $2.6 million dollars worth stock, leaving a nasty taste in investor’s mouth. With shares more than fairly valued at 15.04 times next-year’s current earnings, an EV/EBITDA of 6.193, and horrible operating environment, shares of W.W. Grainger are heading lower.

CSX Corp (CSX): CSX has traded in a 52-week range of $70.70 to $27.61 with a current price per share of $29.22. On January 12th, CSX lowered their fourth-quarter earnings to 63 cents per share and projected revenues of $2.7 billion. On January 21st, CSX said that it sees shipments continuing to decline this year, but re-assured investors that the firm will be able to raise prices. Revenue for the fourth-quarter rose 4% year-over-year based principally on rail efficiencies and higher prices. Rail volumes for CSX from 2006 to 2008 went from 7.358 million to 6.827 million while revenue went from $9.6 billion to $11.3 billion in the same period. Revenue per unit went from $1,300 to $1,649 in 2006 to 2008 while operating margins increased from 20.7% to 24.6% in the same time period.

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