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MSC Industrial misses earnings expectations and gives downbeat outlook, but boosts dividend

Tomi Kilgore

MSC Industrial Direct Co. reported Wednesday a fiscal third-quarter profit and revenue that missed expectations and provided a downbeat outlook, while increasing its dividend by 19%. The distributor of metalworking and maintenance and repair products said net income for the quarter to June 1 rose to $79.6 million, or $1.44 a share, from $79.1 million, or $1.39 a share, in the year-ago period. The FactSet consensus for earnings per share was $1.49. Net sales rose 4.6% to $866.5 million, but was below the FactSet consensus of $881.6 million. "Our fiscal third quarter performance leaves us disappointed," said Chief Executive Erik Gershwind. "We have seen a step-down in demand since April, while the pricing environment remains uncertain due to the overhang of tariffs and trade." For the fourth quarter, the company expects EPS of $1.21 to $1.27, below the FactSet consensus of $1.48, and sales of $835 million to $851 million, below expectations of $883 million. Separately, MSC raised its quarterly dividend to 75 cents a share from 63 cents a share, with the new dividend payable Aug. 6 to shareholders of record on July 23. MSC's stock, which was still inactive in the premarket, has lost 6.1% year to date through Tuesday while the Dow Jones Industrial Average has rallied 14.8%.