Melville-based MSC misses estimates; shares fall
Melville-based MSC Industrial Direct Co. said Thursday that its fiscal first-quarter sales and profit increased. But the gains missed analysts' expectations, triggering a decline in the company's shares in heavy trading.
The shares of Long Island's seventh-largest company by revenue closed at $73.61, down $3.38, or 4.4 percent, in New York Stock Exchange trading Thursday. Volume soared to 2.4 million shares traded, from 494,123 on Wednesday, the day before the financial report.
The stock's fall came after the company reported that sales in the quarter ended Dec. 1 rose to $577.5 million, up 5.8 percent from the same period a year ago, amid softening demand for the industrial tools and supplies MSC distributes. Stock analysts surveyed by Bloomberg News had expected sales of $582.1 million.
The revenue growth came despite "an eroding demand environment impacted by uncertainty and caution over the fiscal cliff, " said Erik Gershwind, who took over as president and CEO Jan. 1 as part of a previously announced succession plan. After much wrangling, Congress averted steep tax hikes, one aspect of the "fiscal cliff," on Dec. 31; Congress delayed action on moderating draconian budget cuts.
Profit rose 5.6 percent to $63.2 million. Per-share earnings rose to $1 from 95 cents.
Operating income, or income produced from running the business, climbed 5.7 percent to $102.4 million. That number was pulled down by a $1.3 million first-quarter expense associated with establishing the company's co-headquarters in Davidson, N.C.
Gershwind said that tighter cost controls helped to lift results but he expects continued challenges in the near term.