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MSC Industrial (MSM) Earnings Top Estimates in Q2, Up Y/Y

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MSC Industrial Direct Company, Inc. (MSM - Free Report) reported second-quarter fiscal 2022 (ended on Feb 26, 2022) adjusted earnings per share of $1.29, beating the Zacks Consensus Estimate of $1.25. The bottom-line figure improved 25% year over year on the back of strong top-line performance, price increase actions and Mission Critical cost savings.

Including one-time items, the company reported earnings per share of $1.25 compared with the year-ago quarter’s 32 cents.

MSC Industrial generated revenues of around $863 million in the quarter under review, up 11% from $774 million reported in the year-ago quarter. The top line missed the Zacks Consensus Estimate of $865 million. The company recorded average daily sales growth of 7.9%.

Operational Update

Cost of goods sold increased 4% year over year to $496 million. Gross profit was up 24% to $366 million. Gross margin came in at 42% compared with the year-ago quarter’s 38%.

Adjusted operating expenses rose 9% year over year to $266 million during the fiscal second quarter. Adjusted operating income amounted to $100 million, up 25% from $81 million. Adjusted operating margin came in at 11.6% in the reported quarter compared with the prior-year quarter’s 10.4%.

Financial Position

MSC Industrial had cash and cash equivalents of $42 million at the end of the fiscal second quarter of 2022 compared with $40 million at the end of fiscal 2021. The company generated cash flow from operating activities of $57 million in the fiscal second quarter compared with the prior-year quarter’s $119 million.

The company’s long-term debt was $584 million at the end of the quarter, unchanged from fiscal 2021-end.

Price Performance

MSC Industrial’s shares have gained 5.4% in the past six months against the industry’s decline of 2.5%.

Zacks Investment Research
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Zacks Rank & Stocks to Consider

MSC Industrial currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the Industrial Products sector are Packaging Corporation of America (PKG - Free Report) , AGCO Corporation (AGCO - Free Report) and Deere & Company (DE - Free Report) . While PKG flaunts a Zacks Rank #1 (Strong Buy), AGCO and DE carry a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Packaging Corp reported adjusted EPS of $2.76 in fourth-quarter 2021, up 108% year over year and beating the Zacks Consensus Estimate of $2.08. PKG pulled off a trailing four-quarter earnings surprise of 22.7%, on average.

Packaging Corp has an expected earnings growth rate of 12.5% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 5% in the past 60 days. PKG’s shares have gained 14% in the past six months.

AGCO Corp's fourth-quarter 2021 adjusted EPS increased 100% year over year to $3.08, beating the Zacks Consensus Estimate of $1.72. AGCO pulled off a trailing four-quarter earnings surprise of 56.6%, on average. In the past six months, the company’s shares have gained 12.2%.

AGCO Corp has an estimated earnings growth rate of around 12.1% for 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 10.8%.

Deere’s first-quarter fiscal 2022 adjusted EPS of $2.92 surpassed the Zacks Consensus Estimate of $2.28. DE delivered a trailing four-quarter earnings surprise of 20.6%, on average.

Deere has a projected earnings growth rate of 19.7% for the current fiscal. The Zacks Consensus Estimate for fiscal 2022 earnings has moved north by 2.3% in the past 60 days. DE has moved up 16.2% in the past six months.