NEW YORK (TheStreet) -- MSC Industrial (MSM - Get Report) shares closed trading down 0.72% to $67.98 on Monday ahead of the release of the metalworking maintenance provider's third quarter earnings results before the opening bell tomorrow.

The Melville, NY-based company is expected to report third quarter earnings of 97 cents per share, a decline from the $1.06 per share it reported in the year ago period.

Revenue for the period is expected to rise to $746.3 million from the year ago total of $720.5 million.

TheStreet Ratings team rates MSC INDUSTRIAL DIRECT as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate MSC INDUSTRIAL DIRECT (MSM) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures, notable return on equity and increase in net income. We feel its strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • MSM's revenue growth has slightly outpaced the industry average of 5.2%. Since the same quarter one year prior, revenues slightly increased by 6.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Trading Companies & Distributors industry average. The net income increased by 4.1% when compared to the same quarter one year prior, going from $49.51 million to $51.53 million.
  • The current debt-to-equity ratio, 0.43, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Trading Companies & Distributors industry and the overall market on the basis of return on equity, MSC INDUSTRIAL DIRECT has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • You can view the full analysis from the report here: MSM Ratings Report