Back to top

Image: Bigstock

Interpreting Applied Industrial Technologies (AIT) International Revenue Trends

Read MoreHide Full Article

Have you evaluated the performance of Applied Industrial Technologies' (AIT - Free Report) international operations for the quarter ending September 2024? Given the extensive global presence of this industrial products company, analyzing the patterns in international revenues is crucial for understanding its financial strength and potential for growth.

In the current global economy, which is more interconnected than ever, a company's success in penetrating international markets is crucial for its financial health and growth journey. Investors must understand a company's dependence on overseas markets, as this offers a window into the company's earnings stability, its ability to benefit from varied economic cycles and its potential for long-term growth.

Being present in foreign markets serves as protection against local economic declines and helps benefit from more rapidly expanding economies. Yet, such expansion also introduces challenges related to currency fluctuations, geopolitical uncertainties and varied market behaviors.

While delving into AIT's performance for the past quarter, we observed some fascinating trends in the revenue from its foreign segments that are commonly modeled and observed by analysts on Wall Street.

The recent quarter saw the company's total revenue reaching $1.1 billion, marking an improvement of 0.3% from the prior-year quarter. Next, we'll examine the breakdown of AIT's revenue from abroad to comprehend the significance of its international presence.

A Look into AIT's International Revenue Streams

During the quarter, Canada contributed $71.48 million in revenue, making up 6.5% of the total revenue. When compared to the consensus estimate of $74.87 million, this meant a surprise of -4.53%. Looking back, Canada contributed $84.35 million, or 7.3%, in the previous quarter, and $75.3 million, or 6.9%, in the same quarter of the previous year.

Other International accounted for 6.4% of the company's total revenue during the quarter, translating to $70.24 million. Revenues from this region represented a surprise of +22.85%, with Wall Street analysts collectively expecting $57.17 million. When compared to the preceding quarter and the same quarter in the previous year, Other International contributed $65.31 million (5.6%) and $60.53 million (5.5%) to the total revenue, respectively.

Anticipated Revenues in Overseas Markets

Wall Street analysts expect Applied Industrial Technologies to report a total revenue of $1.07 billion in the current fiscal quarter, which suggests a decline of 0.4% from the prior-year quarter. Revenue shares from Canada and Other International are predicted to be 6.9% and 5.2%, corresponding to amounts of $74.27 million and $55.98 million, respectively.

For the full year, the company is projected to achieve a total revenue of $4.51 billion, which signifies a rise of 0.7% from the last year. The share of this revenue from various regions is expected to be: Canada at 6.9% ($312.93 million) and Other International at 5.3% ($238.23 million).

Wrapping Up

Relying on international markets for revenues, Applied Industrial Technologies faces both prospects and perils. Thus, tracking the company's international revenue trends is essential for accurately projecting its future trajectory.

In an environment where global interconnections and geopolitical skirmishes are intensifying, Wall Street analysts keep a keen eye on these trends, particularly for firms with overseas operations, to adjust their earnings predictions. Moreover, a range of other aspects, including how a company fares in its home country, significantly affects these projections.

We at Zacks strongly focus on the dynamic earnings forecast of companies, given that empirical studies have demonstrated its potent impact on the immediate price movement of stocks. Invariably, there's a positive relationship -- upward earnings predictions often result in an increase in stock prices.

Boasting a remarkable track record that's been externally verified, the Zacks Rank, our unique stock rating system, leverages changes in earnings projections to function as a reliable gauge for predicting short-term stock price movements.

Currently, Applied Industrial Technologies holds a Zacks Rank #4 (Sell), signifying its potential to underperform the overall market's performance in the forthcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Reviewing Applied Industrial Technologies' Recent Stock Price Trends

Over the past month, the stock has gained 3.7% versus the Zacks S&P 500 composite's 2% increase. The Zacks Industrial Products sector, of which Applied Industrial Technologies is a part, has declined 2.4% over the same period. The company's shares have increased 16.1% over the past three months compared to the S&P 500's 7.9% increase. Over the same period, the sector has risen 2.6%.

See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Applied Industrial Technologies, Inc. (AIT) - free report >>

Published in