Ahead of the Bell: Industrial distributors

Analyst Brent Rakers of Morgan Keegan & Co. said that the weak macroeconomic picture in the United States will likely hurt industrial distributors for the rest of 2008 and 2009. The companies, many of which have large sales presences in Canada, are also suffering from a recent decline in the value of the Canadian dollar.

Rakers also warned of the risk of "deflationary product pricing trends."

"This morning's estimate changes primarily reflect a reduction in the economic outlook across all end markets," he wrote.

For 2009, Rakers cut his profit estimate on W.W. Grainger Inc. from $6.88 per share to $6.60 per share, and his estimate on MSC Industrial Direct Co. from $3.32 to $3.10 per share.

The analyst also reduced 2009 forecasts for Thomas and Betts Corp. from $6.88 to $6.60 per share. Fastenal's 2009 forecast was lowered from $2.02 to $2 per share. He cut his 2009 outlook on Applied Industrial Technologies from $2.29 to $2.16 per share.