TODAY'S PAPER
38° Good Afternoon
38° Good Afternoon
Business

MSC Industrial Supply reports higher 2Q net sales, lower profits

The Melville distributor of tools and maintenance supplies had net sales of $823 million, a 7 percent increase over the year-earlier quarter.

MSC Industrial Supply CEO and president Erik Gershwind,

MSC Industrial Supply CEO and president Erik Gershwind, seen on May 17, 2016. Credit: Newsday/J. Conrad Williams Jr.

MSC Industrial Supply Co. Wednesday posted higher net sales in the second quarter, but lower profits, citing a decline in government markets and softer demand at the tail end of the period.

The Melville distributor of tools and maintenance supplies reported net sales of $823 million, a 7 percent increase over the year-earlier quarter.

Net income was $68.4 million, or $1.24 per diluted share, compared with $117.6 million, or $2.06 per diluted share in the same period in the previous year.

"We did see softer conditions in February that continued into March," Erik Gershwind, MSC's president and chief executive, said in a conference call Wednesday. He cited adverse weather conditions and weaker demand from the oil, gas and automotive industries as reasons for the weak demand.

Shares of MSC fell 2.5 percent Wednesday to close at $81.60. Twelve months ago, the stock was trading at $88.54.

The company forecast third-quarter net sales of $874 million to $891 million and diluted earnings per share of $1.46 to $1.52.

Gershwind said that business rebounded in the first week of April, suggesting that weak business conditions in February and March were "just temporary."

A newly established and majority-owned MSC Mexico unit provides a "strategic foothold," allowing the company to supply U.S. customers from operations in Mexico as well as creating an opening in that market, Gershwind said during the conference call.

"Mexico, over time, we still see as a growth market for manufacturing," he said. "It's something that we've had our eye on for a while."

MSC, which offers more than 1.6 million products as well as inventory management services, is Long Island's third largest publicly traded company behind Henry Schein Inc. and Broadridge Financial Solutions Inc. based on its 2017 revenue of $2.9 billion.

Comments

We're revamping our Comments section. Learn more and share your input.

More news