MSC Industrial stock gains despite Q3 earnings, revenue decline

Investing.com -- MSC Industrial (NYSE: MSM) shares rose more than 3% in premarket trading on Tuesday after the company reported fiscal third-quarter results that beat earnings expectations despite year-over-year declines in profit and sales.

The company posted adjusted earnings per share of $1.08, surpassing the analyst consensus of $1.03. Revenue for the quarter came in at $971.1 million, slightly ahead of expectations for $970.26 million.

However, net sales declined 0.8% from the prior year, and adjusted diluted EPS fell 18.8% from $1.33.

“We delivered fiscal third quarter results that were in line with our expectations,” said CEO Erik Gershwind. He added that MSC saw “early signs of progress” in its efforts to reenergize core customers, grow high-touch solutions, and optimize costs.

Operating income was $82.7 million, or $87.2 million on an adjusted basis, while the adjusted operating margin came in at 9.0%, down from 11.4% a year ago.

CFO Kristen Actis-Grande noted that the company returned $56 million to shareholders during the quarter through dividends and share repurchases, bringing the year-to-date total to $181 million.

For the fourth quarter, MSC expects average daily sales growth of between -0.5% and 1.5% year-over-year. The company also reaffirmed its full-year outlook, including free cash flow conversion of about 120% and capital expenditures of $100 million to $110 million.

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