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Applied Industrial Technologies (AIT - Free Report) reported fourth-quarter fiscal 2024 (ended Jun 30, 2024) earnings of $2.64 per share, which surpassed the Zacks Consensus Estimate of $2.52. The bottom line jumped 12.3% year over year.
Net revenues of $1.16 billion lagged the consensus estimate of $1.19 billion. However, the top line inched up 0.2% year over year. Acquisitions boosted the top line by 1.5% while foreign-currency translation had a negative impact of 0.1%. Organic sales decreased 2% year over year. Selling days had an adverse impact of 0.8%.
Segmental Discussion
The Service Center-Based Distribution segment’s revenues, which contributed 68.2% to net revenues, totaled $791.4 million. On a year-over-year basis, the segment’s revenues increased 1.2%. Our estimate for segmental revenues was $812.4 million. Organic sales decreased 0.7%.
Foreign currency translation lowered sales by 0.1% while acquisitions boosted sales by 1.2%. Selling days had a favorable impact of 0.8% year over year. Segmental revenues were driven by benefits from sales process initiatives, solid growth across national accounts and strength in fluid power maintenance, repair and U.S operations.
The Engineered Solutions segment’s revenues (formerly Fluid Power & Flow Control segment), which contributed 31.8% to net revenues, totaled $369.3 million. On a year-over-year basis, the segment’s revenues decreased 1.8%. Our estimate for the Engineered Solutions segment’s revenues was $379.1 million. Acquisitions boosted the top line by 2%. Organic sales decreased 4.6% due to reduced activity across the automation sector. However, selling days had a favorable impact of 0.8% year over year.
Applied Industrial Technologies, Inc. Price and EPS Surprise
In the reported quarter, Applied Industrial’s cost of sales decreased 1.8% year over year to $804.4 million. Gross profit increased 5.2% year over year to $356.2 million while the gross margin increased to 30.7% from 29.2% in the year-ago quarter. Selling, distribution and administrative expenses (including depreciation) climbed 2.4% year over year to $216.9 million. EBITDA was $153.5 million, indicating an increase of 9.6%.
Balance Sheet & Cash Flow
In fiscal 2024, Applied Industrial had cash and cash equivalents of $460.6 million compared with $344 million at the end of fiscal 2023. Long-term debt was $572.3 million compared with $596.9 million at the end of fiscal 2023.
At the end of the reported quarter, it generated net cash of $371.4 million from operating activities, indicating an increase of 8% from the year-ago period. Capital expenditures totaled $24.9 million, down 6.1% year over year. Free cash flow in fiscal 2024 increased 9.2% year over year to $346.5 million.
In fiscal 2024, AIT rewarded shareholders with dividends of $55.9 million, up 4.6% year over year.
Guidance
For fiscal 2025 (ending June 2025), Applied Industrial anticipates adjusted earnings to be in the range of $9.20-$9.95 per share. The company predicts sales to decrease 2.5% to increase 2.5% year over year.
AIT expects an EBITDA margin in the range of 12.2-12.3%.
Pentair plc (PNR - Free Report) reported second-quarter adjusted earnings per share of $1.22, which beat the Zacks Consensus Estimate of $1.15. The reported figure also improved 18% from the year-ago quarter.
Net sales rose 1.6% year over year to $1.1 billion. PNR’s top line outpaced the Zacks Consensus Estimate of $1.09 billion.
Crown Holdings, Inc. (CCK - Free Report) reported second-quarter adjusted earnings per share of $1.81, which beat the Zacks Consensus Estimate of $1.59. The bottom line improved 8% year over year.
Net sales totaled $3.04 billion, down 2.2% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $3.06 billion.
A. O. Smith Corporation’s (AOS - Free Report) second-quarter adjusted earnings of $1.06 per share missed the Zacks Consensus Estimate of $1.07. However, the bottom line increased 5% on a year-over-year basis.
Net sales of $1.02 billion surpassed the consensus estimate of $992 million. The top line increased 7% year over year, driven by the strong demand for residential and commercial water heaters in North America.
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Applied Industrial (AIT) Q4 Earnings Beat, Revenues Rise Y/Y
Applied Industrial Technologies (AIT - Free Report) reported fourth-quarter fiscal 2024 (ended Jun 30, 2024) earnings of $2.64 per share, which surpassed the Zacks Consensus Estimate of $2.52. The bottom line jumped 12.3% year over year.
Net revenues of $1.16 billion lagged the consensus estimate of $1.19 billion. However, the top line inched up 0.2% year over year. Acquisitions boosted the top line by 1.5% while foreign-currency translation had a negative impact of 0.1%. Organic sales decreased 2% year over year. Selling days had an adverse impact of 0.8%.
Segmental Discussion
The Service Center-Based Distribution segment’s revenues, which contributed 68.2% to net revenues, totaled $791.4 million. On a year-over-year basis, the segment’s revenues increased 1.2%. Our estimate for segmental revenues was $812.4 million. Organic sales decreased 0.7%.
Foreign currency translation lowered sales by 0.1% while acquisitions boosted sales by 1.2%. Selling days had a favorable impact of 0.8% year over year. Segmental revenues were driven by benefits from sales process initiatives, solid growth across national accounts and strength in fluid power maintenance, repair and U.S operations.
The Engineered Solutions segment’s revenues (formerly Fluid Power & Flow Control segment), which contributed 31.8% to net revenues, totaled $369.3 million. On a year-over-year basis, the segment’s revenues decreased 1.8%. Our estimate for the Engineered Solutions segment’s revenues was $379.1 million. Acquisitions boosted the top line by 2%. Organic sales decreased 4.6% due to reduced activity across the automation sector. However, selling days had a favorable impact of 0.8% year over year.
Applied Industrial Technologies, Inc. Price and EPS Surprise
Applied Industrial Technologies, Inc. price-eps-surprise | Applied Industrial Technologies, Inc. Quote
Margin Profile
In the reported quarter, Applied Industrial’s cost of sales decreased 1.8% year over year to $804.4 million. Gross profit increased 5.2% year over year to $356.2 million while the gross margin increased to 30.7% from 29.2% in the year-ago quarter. Selling, distribution and administrative expenses (including depreciation) climbed 2.4% year over year to $216.9 million. EBITDA was $153.5 million, indicating an increase of 9.6%.
Balance Sheet & Cash Flow
In fiscal 2024, Applied Industrial had cash and cash equivalents of $460.6 million compared with $344 million at the end of fiscal 2023. Long-term debt was $572.3 million compared with $596.9 million at the end of fiscal 2023.
At the end of the reported quarter, it generated net cash of $371.4 million from operating activities, indicating an increase of 8% from the year-ago period. Capital expenditures totaled $24.9 million, down 6.1% year over year. Free cash flow in fiscal 2024 increased 9.2% year over year to $346.5 million.
In fiscal 2024, AIT rewarded shareholders with dividends of $55.9 million, up 4.6% year over year.
Guidance
For fiscal 2025 (ending June 2025), Applied Industrial anticipates adjusted earnings to be in the range of $9.20-$9.95 per share. The company predicts sales to decrease 2.5% to increase 2.5% year over year.
AIT expects an EBITDA margin in the range of 12.2-12.3%.
Zacks Rank
The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Industrial Companies
Pentair plc (PNR - Free Report) reported second-quarter adjusted earnings per share of $1.22, which beat the Zacks Consensus Estimate of $1.15. The reported figure also improved 18% from the year-ago quarter.
Net sales rose 1.6% year over year to $1.1 billion. PNR’s top line outpaced the Zacks Consensus Estimate of $1.09 billion.
Crown Holdings, Inc. (CCK - Free Report) reported second-quarter adjusted earnings per share of $1.81, which beat the Zacks Consensus Estimate of $1.59. The bottom line improved 8% year over year.
Net sales totaled $3.04 billion, down 2.2% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $3.06 billion.
A. O. Smith Corporation’s (AOS - Free Report) second-quarter adjusted earnings of $1.06 per share missed the Zacks Consensus Estimate of $1.07. However, the bottom line increased 5% on a year-over-year basis.
Net sales of $1.02 billion surpassed the consensus estimate of $992 million. The top line increased 7% year over year, driven by the strong demand for residential and commercial water heaters in North America.