Fastenal Company (NASDAQ: FAST), a company that sells supplies to the construction industry and whose colleagues include W.W. Grainger (NYSE: GWW) and MSC Industrial Direct Co. (NYSE: MSM), didn't do so well in its third quarter. According to Reuters, per-share profit missed expectations by a penny, coming in at 32 cents. Net sales, however, met expectations at $489 million.

A comparison of this year's data to last year's results also indicates a rather tepid performance. Fastenal earned 49 cents per share in the year-ago period according to the actual press release. In addition, the current quarter's top line saw a decline of well over 20%. The economy is limiting Fastenal's ability to grow, no question about that.

Analyst upgrades:

• Thomas Weisel upgraded SanDisk (NASDAQ: SNDK) to Overweight from Market Weight due to accelerating manufacturing cost declines, potential NAND flash sourcing upside at Toshiba (OTC: TOSBF) and Samsung and an increase in 2H09 demand.
  
• Oppenheimer upgraded Quality Systems (NASDAQ: QSII) to Perform from Underperform to reflect potential benefits from the stimulus package and channel checks that indicated IT budgets are stabilizing. The firm raised its target price on shares to $54 from $40.
  
• RBC Capital upgraded OSI Pharmaceuticals (NASDAQ: OSIP) to Outperform from Sector Perform following positive Tarceva survey results and cites valuation.
• Marriott (NYSE: MAR) was upgraded to Outperform from Market Perform at JMP Securities.
  
• Grainger (NYSE: GWW) was upgraded to Buy from Neutral at BofA/Merrill.
  
• Duncan Energy Partners (NASDAQ: DEP) was upgraded to Buy from Neutral at UBS.

Analyst upgrades:

• Goldman upgraded Gerdau AmeriSteel (NYSE: GNA) to Buy from Neutral and has a $5.50 target on shares. Shares were upgraded due to the potential impact from infrastructure spending. Note that Goldman downgraded Steel Dynamics (NYSE: STLD) and Olympic Steel (NYSE: ZEUS) to Neutral from Buy.
  
• Banc of America/Merrill upgraded Coca-Cola Enterprises (NYSE: CCE) to Buy from Neutral and raised the price target to $18 from $15. The firm the strong Q1 report gives them greater confidence in shares.
  
• Roth Capital upgraded Halozyme (NASDAQ: HALO) to Buy from Hold due to increased clarity into Roche programs, the discontinuation of the chemophase program, and progress on insulin delivery.
• American Movil (NYSE: AMX) was raised to Overweight from Neutral at JP Morgan and to Hold from Sell at Citigroup.
  
• Barclays (NYSE: BCS) and Lloyds TSB Group (NYSE: LYG) were upgraded at HSBC to Overweight from Neutral.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Abbott Laboratories (NYSE: ABT) Q1 profit edged past expectations despite lower sales of Humira.
• AMR Corp. (NYSE: AMR) posted a smaller-than-expected Q1 loss, sending shares sharply higher.
• Baxter International Inc. (NYSE: BAX) reported better-than-expected Q1 earnings, sending share higher.
• BP (NYSE: BP) and other oil companies were downgraded due to higher environmental costs.
• Charles Schwab Corp. (NASDAQ: SCHW) Q1 earnings declined but still topped analysts' expectations.
• Chevron Corp. (NYSE: CVX) said Q1 earnings would be lower due to a weaker dollar and lower oil prices.

WW Grainger (NYSE: GWW - option chain) shares are moving higher today after the company reported a first-quarter profit of $96.38 million, or $1.25 per share, beating analysts' projections of $1.07 per share. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on GWW.

GWW opened this morning at $80.00. So far today the stock has hit a low of $79.73 and a high of $86.06. As of 11:25, GWW is trading at $82.48, up $5.24 (6.8%). The chart for GWW looks neutral and S&P gives GWW a 3 STARS (out of 5) hold ranking.

Analyst upgrades:

• Jefferies upgraded MSC Industrial (NYSE:MSM) to Buy from Hold after meeting with management as they believe shares are attractive at current levels. The firm raised their target price to $44 from $32.
  
• UBS upgraded DuPont Fabros (NYSE:DFT) to Buy from Neutral and raised their target to $7 from $2. The firm believes DuPont Fabros will receive a waiver on its CH1 Construction loan for at least a year.
  
• Royal Bank of Scotland upgraded Credit Suisse (NYSE:CS) to Buy from Hold to reflect the company's derisking of its trading book.
• Smith & Nephew (NYSE:SNN) was upgraded to Buy from Neutral at Goldman and added to the Conviction Buy List; Cigna (NYSE:CI) was also added to the Conviction Buy List.
  
• Affymetrix (NASDAQ:AFFX) was raised to Equal Weight from Underweight at Morgan Stanley.
  
• Airtran Holdings (NYSE:AAI) was upgraded to Buy from Hold at Jesup & Lamont.

Analyst upgrades:

• Baird upgraded Bank of America (NYSE: BAC) to Outperform from Neutral citing valuation and long-term earnings power.
• Keefe Bruyette upgraded shares of Nationwide Financial (NYSE: NFS) to Outperform from Market Perform as it believes the deal is not at risk and will close at the agreed upon $52.25 price.
  
• Friedman Billings upgraded American Eagle (NYSE: AEO) to Outperform from Market Perform citing valuation.
• Eli Lilly (NYSE: LLY) was upgraded to Hold from Sell at Natixis.
• W.W. Grainger (NYSE: GWW) was upgraded to Outperform from Neutral at RW Baird.
• Fidelity National (NYSE: FIS) was upgraded to Buy from Neutral at SunTrust.

Analyst downgrades:

• Credit Suisse downgraded Eli Lilly NYSE:(LLY) to Neutral from Outperform citing the increased risk profile from the ImClone (IMCL) deal.
• Soleil downgraded Google (NASDAQ:GOOG) to Hold from Buy as it believes Google's cost management may lag revenue weakness and that the falling stock price implies employee defections. The firm lowered its target to $350 from $580.
• Piper downgraded shares of Orbitz (NYSE:OWW) to Sell from Neutral to reflect deteriorating travel industry fundamentals and the company's levered balance sheet.
  
• US Steel (NYSE:X) was downgraded to Neutral from Buy at Goldman.
• Philips Electronics (NYSE:PHG) was downgraded to Hold from Buy at ING Group.
• Lamar Advertising (NASDAQ:LAMR) was downgraded to Hold from Buy at Soleil.
• Cemex (NYSE:CX) was downgraded to Hold from Buy at Citigroup.
  

Analyst initiations:

• Bidz.com (NASDAQ:BIDZ), American Superconductor (NASDAQ:AMSC) and Union Bankshares (NASDAQ:UBSH) were today's noteworthy initiations:
  
• Bidz.com (NASDAQ:BIDZ) was initiated with a Hold at Stamford, as the firm does not want to recommend a company that has never been tested during difficult economic times, but is positive on BIDZ's growth potential.
• American Superconductor (NASDAQ:AMSC) was initiated with a Hold at Stanford, as the firm believes the Euro decline and global market turmoil are near-term risks.
• Union Bankshares (NASDAQ:UBSH) was initiated with an Underperform at RBC Capital, as the firm views shares as overvalued.
• Regis Corp (NYSE:RGS) was initiated with a Neutral at RW Baird.
• CommVault's (NASDAQ:CVLT) coverage was resumed with a Neutral at Merrill Lynch.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Activision Blizzard Inc. (NASDAQ: ATVID) sees strong Q1 results driven by Guitar Hero.
• Allegheny Technologies Inc. (NYSE: ATI) raised its Q2 earnings guidance ahead of its report.
• Cintas Corp. (NASDAQ: CTAS) strong Q4 and full-year results included a record quarterly revenue.
• Citigroup (NYSE: C) posted better-than-expected results despite a big loss on further write-downs.
• eBay Inc. (NASDAQ: EBAY) reported better-than-expected results and offered a soft outlook (see transcript).
• Fastenal Co. (NASDAQ: FAST) posted strong Q2 earnings despite the housing slump but lower revenues.
• Grainger Inc. (NYSE: GWW) posted strong Q2 results on expansion in Mexico and China.
• Harley-Davidson Inc. (NYSE: HOG) beat Q2 expectations despite profit and revenue declines.
• International Business Machines Corp. (NYSE: IBM) easily topped Wall Street earnings expectations.
• Johnson & Johnson (NYSE: JNJ) beat Q2 estimates and raised its full-year forecast (see transcript).
• Kimberly-Clark Corp. (NYSE: KMB) warned of lower Q2 earnings due to energy and distribution costs.
• Merrill Lynch & Co. (NYSE: MER) reported worse-than-expected Q2 results on further write downs.
• Microsoft Corp. (NASDAQ: MSFT) earnings surged but investors were put off by its full-year guidance.
• Procter & Gamble Co. (NYSE: PG) reaffirmed its guidance following the Kimberly-Clark warnings.
• United Technologies Corp. (NYSE: UTX) beat Q2 estimates, lifting shares from a recent 52-week low.
• ValueClick Inc. (NASDAQ: VCLK) posted weak results and warned about the second half of the year.

For more highlights from this week, see: Google, Intel, JPMorgan, Coca-Cola, Nokia and others

The earnings crunch continues next week. Among companies scheduled to report are Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), Merck (NYSE: MRK), Texas Intruments (NYSE: TXN), Caterpillar (NYSE: CAT), Halliburton (NYSE: HAL), United Parcel Service (NYSE: UPS), Wachovia (NYSE: WB), Yahoo! (NASDAQ: YHOO), Amazon (NASDAQ: AMZN), Anheuser-Busch (NYSE: BUD), AT&T Inc. (NYSE: T), McDonald's (NYSE: MCD), PepsiCo (NYSE: PEP), Pfizer (NYSE: PFE), Boeing (NYSE: BA), Hershey (NYSE: HSY), and Southwest Airlines (NYSE: LUV).

Visit AOL Money & Finance for more earnings coverage.

Grainger (NYSE: GWW) supplies all manner of facilities maintenance products to all types of businesses. The company just posted great 2Q numbers. Sales gained 10% to $1.8 billion. Net earnings increased 8% to $113 million and EPS turned out a healthy $1.43. Grainger posted these good numbers and gained market share in a slowing economy. Nice work.

Grainger operates in the U.S., Mexico and is beginning to establish a footprint in China. The company is expanding both its product line and its market reach in each of these markets. Sales in the U.S. grew 9% and the company opened 6 new full service locations. Sales in Mexico grew 25% and the company opened one new full service location. China sales doubled to $2 million from the company's one location, with big expansion plans for the future. Grainger has added another 100,000 products to its catalog and repurchased 800,000 shares of stock for $75 million. CEO James Ryan forecasts FY2008 EPS in the $5.80-$6.10 range, not a bad return on a stock that currently trades right around $86.

As the second quarter earnings crunch begins in earnest this week, the bear market has investors jittery and prognosticators spinning out dire warnings. In the wake of mixed results from Alcoa (NYSE: AA) and General Electric (NYSE: GE) kicking things off last week, here's a look at what Wall Street is expecting from many of the companies scheduled to report this coming week.

Analysts surveyed by Thomson Financial are expecting the following companies to report a rise in earnings when compared to the same period of the previous year.

• Nucor Corp. (NYSE: NUE): $1.80 EPS (36.6%) on sales of $6.4 billion (+53.0%)
• Google Inc. (NASDAQ: GOOG): $4.74 EPS (24.9%) on sales of $3.9 billion (+41.6%)
• Nokia Corp. (NYSE: NOK): 56 cents EPS (23.2%) on sales of $19.9 billion (+17.8%)
• CSX Corp. (NYSE: CSX): 90 cents EPS (21.1%) on sales of $2.9 billion (+12.8%)
• Altera Corp. (NASDAQ: ALTR): 27 cents EPS (18.5%) on sales of $346.7 million (+8.4%)
• IBM (NYSE: IBM): $1.82 EPS (+17.6%) on sales of $25.9 billion (+9.0%)
• eBay Inc. (NASDAQ: EBAY): 41 cents EPS (17.1%) on sales of $2.2 billion (+18.0%)
• W.W. Grainger Inc. (NYSE: GWW): $1.46 EPS (17.1%) on sales of $1.7 billion (+8.0%)
• Microsoft Corp. (NASDAQ: MSFT): 47 cents EPS (17.0%) on sales of $15.7 billion (+17.0%)
• Honeywell International Inc. (NYSE: HON): 94 cents EPS (17.0%) on sales of $9.2 billion (+7.9%)

Monday, June 9

• The Pediatric Ethics Subcommittee of the Pediatric Advisory Committee will meet at 8:30 am to discuss the application of 21 CFR 50.52 (Clinical investigations involving greater than minimal risk but presenting the prospect of direct benefit to individual subjects) to FDA-regulated research. The discussion will be illustrated with hypothetical case examples of research involving HIV vaccines in adolescents and controlled trials of inhaled corticosteroids in children with asthma.
• Texas Instruments (NYSE: TXN) to give mid-quarter update at 5:00 pm.

Tuesday, June 10

• The Pediatric Ethics Subcommittee will meet at 8:00 am to discuss the application of 21 CFR 50.52 to FDA-regulated research illustrated with a hypothetical case example of research using stem cells for treating periventricular white matter injury in children.
• Cisco Systems (NASDAQ: CSCO) to hold conference call at 11:00 am to discuss business video innovation.
• Varian Medical Systems (NYSE: VAR) to hold mid-year review meeting at 12:00 pm.

Monday, May 12

• Sprint Nextel Corp. (NYSE: S) to report Q1 earnings; conference call at 8:00am.
• W.W. Grainger, Inc. (NYSE: GWW) to hold sales conference call at 8:00am.
• XM Satellite Radio Holdings, Inc. (NASDAQ: XMSR) and Sirius Satellite Radio, Inc. (NASDAQ: SIRI) to report quarterly earnings; the conference call is at 10:00am for XM and at 4:30pm for Sirius.

Tuesday, May 13

• Wal-Mart Stores, Inc. (NYSE: WMT) to report Q1 earnings; conference call at 7:30am.
• Toll Brothers, Inc. (NYSE: TOL) to report preliminary Q2 results and outlook at 2pm.
• Applied Materials, Inc. (NASDAQ: AMAT) to report Q2 earnings; conference call at 4:30pm.

Wednesday, May 14

• FCC Open Commission Meeting at 9:30am.
• SEC Open Commission Meeting at 10:00am.
• Macy's, Inc. (NYSE: M) to report Q1 earnings; conference call at 10:30am.
• Agilent Technologies, Inc. (NYSE: A) to report Q2 earnings; conference call at 4:30pm.

MOST NOTEWORTHY: W.W. Grainger, American Express and Microsoft were today's noteworthy downgrades:

• Baird downgraded W.W. Grainger Inc (NYSE: GWW) to Neutral from Outperform, citing concerns regarding the the federal lawsuit accusing the company of overcharging the U.S. Government.
• American Express Company (NYSE: AXP) was lowered to Market Perform from Outperform to reflect their assumption for a weaker economy.
• RBC Capital downgraded Microsoft Corporation (NASDAQ: MSFT) to Sector Perform from Outperform citing Yahoo! Inc's (NASDAQ: YHOO) rejection of its $31/share bid and a counteroffer of $40/share. The firm expects a deal to get done between $35.00-$40.00 per share, resulting in increased dilution.

OTHER DOWNGRADES:

• Citigroup downgraded Telecom Italia SpA (NYSE: TI) to Hold from Buy.
• Thomas Weisel downgraded Zumiez Inc (NASDAQ: ZUMZ) to Market Weight from Overweight.
• Oppenheimer downgraded Independent Bank Corporation (NASDAQ: IBCP) to Underperform from Perform.

MOST NOTEWORTHY: Antofagasta plc, Merrill Lynch, Valueclick, Telmex and Network Appliance were today's noteworthy upgrades:

• UBS upgraded shares of Antofagasta (OTC: ANFGY) to Neutral from Sell as they see a strong possibility of delays to copper supply due to an earthquake on Nov. 14 in northern Chile.
  
• Credit Suisse is positive on the appointment of John Thain as Merrill Lynch (NYSE: MER)'s CEO and his ability to get the company back on track strategically. The firm upgraded shares of Merrill to Outperform from Neutral.
  
• Valueclick (NASDAQ: VCLK) was upgraded to Buy from Hold at Citigroup on valuation, as they believe the recent sell-off provides a great entry point.
  
• Citigroup also raised its rating on Telmex (NYSE: TMX) to Buy from Hold after the company announced the spin-off of its international businesses.
  
• Bear Stearns upgraded Network Appliance (NASDAQ: NTAP) to Peer Perform from Underperform following its Q2 report and increased outlook.

OTHER UPGRADES:

• RBC Capital upgraded Sciele Pharma (NASDAQ: SCRX) to Sector Perform from Underperform.
  
• Lehman upgraded Amgen (NASDAQ: AMGN) to Overweight from Equal Weight.
  
• W.W. Grainger (NYSE: GWW) was upgraded to Outperform from Market Perform at Morgan Keegan.
  
• Merrill Lynch upgraded Weyerhaeuser (NYSE: WY) to Buy from Neutral.

ANFGY;MER;VCLK;TMX;NTAP;SCRX;AMGN;GWW;WY

Demand for new residential and commercial construction continues to be weak in many parts of the country, though that will change shortly in California. But maintenance of existing facilities continues to be a growth industry. W.W. Grainger (NYSE: GWW) is the leading supplier of facilities maintenance products. The company posted record numbers in its most recent earnings report. Sales increased 9% to $1.9 billion, operating earnings increased 15% to $174 million, and EPS increased 11%. Based on these figures, CEO Richard Keyser has revised FY 2007 EPS guidance from $4.75-$4.90 to $4.85-$4.95.

Grainger is pursuing a market expansion strategy and a product line expansion simultaneously. The company has added 70,000 new products in its U.S. locations, opened four new U.S. locations, and continues to exit existing low margin contracts as they expire in 2007. Daily sales have increased each month for July, August, and September. Sales in the U.S. increased 9%, dwarfed by the 24% increase in sales in Mexico and the opening of two more locations. Grainger is also entering the facilities maintenance market in China, a smart move given the massive amount of construction in progress in China.

But current numbers are not the only reason to check out Grainger. Motley Fool lists Grainger as a stock to own for the rest of your life, based on Grainger's dividend pay out record. The current dividend yield is 1.5%, with a payout ratio of 26% and YoY quarterly dividend growth in excess of 20%. In order for a company to pay out increasingly higher dividends over the long haul, it must be able to generate sufficient amounts of cash regularly and repeatedly. Grainger has certainly demonstrated it can do that. The stock traded recently at $89.05, up 16 cents.

Visit AOL Money & Finance for more earnings coverage