We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Applied Industrial (AIT) Gains 2% Since Q1 Earnings Release
Read MoreHide Full Article
Applied Industrial Technologies (AIT - Free Report) shares have gained 2.4% since its first-quarter fiscal 2023 (ended Sep 30, 2022) earnings release on Oct 27. Better-than-expected results and an improved fiscal 2023 outlook seem to have pleased investors.
The company reported first-quarter fiscal 2023 earnings of $1.97 per share, beating the Zacks Consensus Estimate of $1.64. The bottom line jumped approximately 45% year over year. Net sales of $1,062.4 million also outperformed the Zacks Consensus Estimate of $987 million. The top line jumped 19.2% year over year.
Simultaneously, Applied Industrial improved its earnings and sales forecast for fiscal 2023. The company expects earnings of $6.90-$7.55 per share compared with $6.65-$7.30 anticipated earlier. The mid-point of the guided range — $7.23 — lies below the Zacks Consensus Estimate of $7.52. The company anticipates sales to increase 5-9% for fiscal 2023, compared with a rise of 3-7% estimated earlier.
Applied Industrial Technologies, Inc. Price, Consensus and EPS Surprise
Coming back to the fiscal first-quarter performance, results benefited from 19.4% growth in organic sales and 0.2% gain from acquisitions. The increase was partially offset by an adverse impact of 0.5% from foreign currency translation.
Segmental Discussion
Service Center-Based Distribution’s revenues totaled $717.99 million, which contributed 67.6% to net revenues in the quarter under review. On a year-over-year basis, the segment’s revenues increased 19.5%. Organic sales grew 20.3%. Foreign currency translation had a negative impact of 0.8%. Segmental revenues were driven by benefits from break-fix MRO activity, sales process initiatives, pricing actions and investments across the U.S. manufacturing sector. Growth was strong across the food & beverage, mining, metals, pulp & paper, energy, aggregates, lumber & wood and transportation end markets.
Engineered Solutions’ (formerly Fluid Power & Flow Control segment) revenues totaled $344.4 million, which contributed 32.4% to net revenues in the reported quarter. On a year-over-year basis, the segment’s revenues increased 18.4%. Organic sales ascended 17.8%, owing to growth across mining, metals, agriculture, chemicals, technology, food & beverage, and machinery end markets. Acquisitions contributed 0.6% to segmental revenues.
Margin Profile
In the reported quarter, Applied Industrial’s cost of sales increased 18.7% year over year to $755.62 million. Gross profit in the quarter grew 20.1% year over year to $306.78 million, while gross margin increased 30 basis points (bps) to 28.9%. Selling, distribution and administrative expenses (including depreciation) climbed 10.8% year over year to $200.25 million. EBITDA was $118.71 million, reflecting an increase of 34.2%.
Balance Sheet & Cash Flow
At the end of first-quarter fiscal 2023, Applied Industrial had cash and cash equivalents of $147.58 million compared with $184.47 million at the end of fiscal 2022. Long-term debt was $649.2 million, nearly flat on a sequential basis.
At the end of the reported quarter, Applied Industrial generated net cash of $25.94 million from operating activities, reflecting a decrease of 46.7% from the year-ago quarter. Capital expenditures totaled $5.55 million, up 53.4% year over year. Free cash flow in the reported quarter decreased 54.7% to $20.39 million.
In the fiscal first quarter, Applied Industrial rewarded its shareholders with a dividend payout of $13.1 million, up 3.1% year over year.
Fiscal 2023 Guidance
Applied Industrial expects organic sales to increase 6-10% in the ongoing fiscal year. EBITDA margin is predicted to be 10.9-11.2% compared with 10.8-11.1% anticipated earlier.
Dividend Update
Applied Industrial’s board approved a quarterly cash dividend of 34 cents per share, payable to shareholders on Nov 30, of record as of Nov 15.
Zacks Rank & Other Key Picks
Applied Industrial currently sports a Zacks Rank #1 (Strong Buy).
Some other companies from the Industrial Products sector worth considering are as follows:
Enerpac Tool has an estimated earnings growth rate of 44.6% for the current fiscal year. The company’s shares have rallied 23.2% in the past three months.
iRobot Corporation (IRBT - Free Report) presently has a Zacks Rank of 2 (Buy). IRBT’s earnings surprise in the last four quarters was 59.1%, on average.
iRobot has an estimated earnings growth rate of 36.6% for the current year. The stock has gained 10.9% in the past three months.
Reliance Steel & Aluminum Co. (RS - Free Report) presently carries a Zacks Rank of 2. Its earnings surprise in the last four quarters was 13.6%, on average.
Reliance Steel has an estimated earnings growth rate of 29.7% for the current year. The stock has appreciated 7.2% in the past three months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Applied Industrial (AIT) Gains 2% Since Q1 Earnings Release
Applied Industrial Technologies (AIT - Free Report) shares have gained 2.4% since its first-quarter fiscal 2023 (ended Sep 30, 2022) earnings release on Oct 27. Better-than-expected results and an improved fiscal 2023 outlook seem to have pleased investors.
The company reported first-quarter fiscal 2023 earnings of $1.97 per share, beating the Zacks Consensus Estimate of $1.64. The bottom line jumped approximately 45% year over year. Net sales of $1,062.4 million also outperformed the Zacks Consensus Estimate of $987 million. The top line jumped 19.2% year over year.
Simultaneously, Applied Industrial improved its earnings and sales forecast for fiscal 2023. The company expects earnings of $6.90-$7.55 per share compared with $6.65-$7.30 anticipated earlier. The mid-point of the guided range — $7.23 — lies below the Zacks Consensus Estimate of $7.52. The company anticipates sales to increase 5-9% for fiscal 2023, compared with a rise of 3-7% estimated earlier.
Applied Industrial Technologies, Inc. Price, Consensus and EPS Surprise
Applied Industrial Technologies, Inc. price-consensus-eps-surprise-chart | Applied Industrial Technologies, Inc. Quote
Coming back to the fiscal first-quarter performance, results benefited from 19.4% growth in organic sales and 0.2% gain from acquisitions. The increase was partially offset by an adverse impact of 0.5% from foreign currency translation.
Segmental Discussion
Service Center-Based Distribution’s revenues totaled $717.99 million, which contributed 67.6% to net revenues in the quarter under review. On a year-over-year basis, the segment’s revenues increased 19.5%. Organic sales grew 20.3%. Foreign currency translation had a negative impact of 0.8%. Segmental revenues were driven by benefits from break-fix MRO activity, sales process initiatives, pricing actions and investments across the U.S. manufacturing sector. Growth was strong across the food & beverage, mining, metals, pulp & paper, energy, aggregates, lumber & wood and transportation end markets.
Engineered Solutions’ (formerly Fluid Power & Flow Control segment) revenues totaled $344.4 million, which contributed 32.4% to net revenues in the reported quarter. On a year-over-year basis, the segment’s revenues increased 18.4%. Organic sales ascended 17.8%, owing to growth across mining, metals, agriculture, chemicals, technology, food & beverage, and machinery end markets. Acquisitions contributed 0.6% to segmental revenues.
Margin Profile
In the reported quarter, Applied Industrial’s cost of sales increased 18.7% year over year to $755.62 million. Gross profit in the quarter grew 20.1% year over year to $306.78 million, while gross margin increased 30 basis points (bps) to 28.9%. Selling, distribution and administrative expenses (including depreciation) climbed 10.8% year over year to $200.25 million. EBITDA was $118.71 million, reflecting an increase of 34.2%.
Balance Sheet & Cash Flow
At the end of first-quarter fiscal 2023, Applied Industrial had cash and cash equivalents of $147.58 million compared with $184.47 million at the end of fiscal 2022. Long-term debt was $649.2 million, nearly flat on a sequential basis.
At the end of the reported quarter, Applied Industrial generated net cash of $25.94 million from operating activities, reflecting a decrease of 46.7% from the year-ago quarter. Capital expenditures totaled $5.55 million, up 53.4% year over year. Free cash flow in the reported quarter decreased 54.7% to $20.39 million.
In the fiscal first quarter, Applied Industrial rewarded its shareholders with a dividend payout of $13.1 million, up 3.1% year over year.
Fiscal 2023 Guidance
Applied Industrial expects organic sales to increase 6-10% in the ongoing fiscal year. EBITDA margin is predicted to be 10.9-11.2% compared with 10.8-11.1% anticipated earlier.
Dividend Update
Applied Industrial’s board approved a quarterly cash dividend of 34 cents per share, payable to shareholders on Nov 30, of record as of Nov 15.
Zacks Rank & Other Key Picks
Applied Industrial currently sports a Zacks Rank #1 (Strong Buy).
Some other companies from the Industrial Products sector worth considering are as follows:
Enerpac Tool Group Corp. (EPAC - Free Report) delivered an average four-quarter earnings surprise of 3.4%. EPAC presently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks.
Enerpac Tool has an estimated earnings growth rate of 44.6% for the current fiscal year. The company’s shares have rallied 23.2% in the past three months.
iRobot Corporation (IRBT - Free Report) presently has a Zacks Rank of 2 (Buy). IRBT’s earnings surprise in the last four quarters was 59.1%, on average.
iRobot has an estimated earnings growth rate of 36.6% for the current year. The stock has gained 10.9% in the past three months.
Reliance Steel & Aluminum Co. (RS - Free Report) presently carries a Zacks Rank of 2. Its earnings surprise in the last four quarters was 13.6%, on average.
Reliance Steel has an estimated earnings growth rate of 29.7% for the current year. The stock has appreciated 7.2% in the past three months.