Industrial tools distributor MSC Industrial Direct Co., Inc. (MSM: Quote) reported Thursday a profit for the third quarter that increased 13 percent from last year, reflecting quarterly sales growth. Both earnings per share and quarterly revenues missed analysts' expectations by a whisker. The company also provided earnings guidance for the fourth quarter, below Street view.
"I'm very pleased with our performance this quarter. In an environment that has seen some recent leveling in growth rates, we continued to invest in our future and gained further traction with our strategic initiatives, while delivering solid earnings," CEO David Sandler said in a statement.
The Melville, New York-based company posted net income of $70.21 million or $1.10 per share for the third quarter, higher than $62.09 million or $0.97 per share in the prior-year quarter.
On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $1.11 per share for the third quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter grew 15 percent to $611.97 million from $532.37 million in the same quarter last year, but missed eleven Wall Street analysts' consensus estimate of $617.31 million by a whisker.
"Customers are increasingly turning to suppliers like MSC who can deliver these solutions, and we remain committed to the developments in technology and value added services that will build upon our leadership position," President and COO Erik Gershwind noted.
Operating income for the quarter increased 13 percent to $110.9 million or 18.1 percent of sales, from $98.1 million or 18.4 percent of sales, in the year-ago quarter. Operating expenses were $168.72 million, higher than $153.43 million in the prior-year quarter.
Gross profit for the third quarter increased to $279.58 million from $251.56 million in the year-ago quarter.
Looking ahead to the fourth quarter, the company expects earnings in a range of $1.05 to $1.09 per share on projected net sales between $630 million and $642 million, with average daily sales growth of 10.5 percent. Fiscal 2012 is a 53-week year and has an additional week.
Street is currently looking for earnings of $1.10 per share on revenues of $627.48 million for the fourth quarter.
"Looking ahead, we believe that the combination of digital information, e-Commerce, vending and supportive technology is clearly shifting the value equation toward those distributors with the ability to invest in these capabilities. Against this backdrop, we expect our investments will widen the gap with competitors and lock in share gains," Gershwind added.
MSM closed Wednesday's regular trading session at $62.42, down $1.72 on a volume of 1.25 million shares, higher than the three-month average volume of 0.55 million shares.
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by RTT Staff Writer
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