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MSC Industrial (MSM) to Post Q2 Earnings: What's in Store?

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MSC Industrial Direct Co., Inc. (MSM - Free Report) is scheduled to report second-quarter fiscal 2021 results on Apr 7, before the opening bell.

Q2 Estimates

The Zacks Consensus Estimate for fiscal second-quarter revenues is pegged at $781 million, indicating a marginal year-over-year decline of 0.6%. The same for earnings per share stands at $1.03, suggesting year-over-year growth of 3%. The estimate for earnings has remained unrevised for the past 30 days.

Q1 Results

In the last reported quarter, MSC Industrial’s revenues and earnings declined on a year-over-year basis. While the bottom-line figure beat the Zacks Consensus Estimate, sales missed the same. Notably, the company has a trailing four-quarter earnings surprise of 8.53%, on an average.

Price Performance

Shares of the company have gained 62.9% in a year compared with the industry’s rally of 94%.

Factors to Note

MSC Industrial has been witnessing a surge in sales order of personal protective equipment (PPE) and safety products courtesy of higher customer demand in response to the coronavirus pandemic. This heightening demand is primarily stemming from customers in the front-lines of the pandemic, including hospitals, healthcare providers, governments, first responders and critical manufactures. The company has been seeing increased levels of safety and janitorial product sales to large healthcare, government and critical manufacturing customers, which are anticipated to have favored the fiscal second-quarter performance.

MSC Industrial is also benefiting from its continued focus on growth initiatives, particularly mission-critical initiative, impressive execution of pricing actions as well as structural cost reductions. These are likely to have improved the company’s margin performance in the fiscal second quarter. Apart from this, the company is gaining from new customer wins in metalworking business driven by its significant cutting tool applications, MSC Millmax.

Further, with customers forced to stay indoors due to restrictions imposed by governments globally to contain the coronavirus spread, the company’s e-commerce sales are likely to have contributed to the to-be-reported quarter’s performance.

However, it is bearing the brunt of weak industrial production. Also, metalworking centric end markets continue being affected by the pandemic-induced weakness.

What the Zacks Model Unveils

Our proven model does not conclusively predict anearnings beat for MSC Industrial this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat but that is not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: MSC Industrial has an Earnings ESP of 0.00%.

Zacks Rank: MSC Industrial currently carries a Zacks Rank of 3.

Stocks Poised to Beat Earnings Estimates

Here are some stocks, which you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases:

Winnebago Industries (WGO - Free Report) has an Earnings ESP of +2.17% and flaunts a Zacks Rank of 1, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

KushCo Holdings, Inc. KSHB, currently a Zacks #2 Ranked stock, has an Earnings ESP of +23.08%.

Costco Wholesale Corporation COST holds a Zacks Rank of 3 and has an Earnings ESP of +0.06%, at present.

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