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Nordson (NDSN) Q2 Earnings & Revenues Surpass Estimates

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Nordson Corporation (NDSN - Free Report) reported better-than-expected second-quarter fiscal 2021 (ended Apr 30, 2021) results. Quarterly earnings and sales surpassed the Zacks Consensus Estimate by 28.5% and 7.5%, respectively.

Adjusted earnings, excluding one-time charges and gains, in the reported quarter were $2.12 per share, surpassing the consensus estimate of $1.65. Also, the bottom line increased 34% from the year-ago figure of $1.58 owing to growth in sales.

Revenue Details

In the reported quarter, Nordson’s net sales were $589.5 million, up 11.3% year over year. The top line benefited from 10.4% improvement in organic volumes, and a positive impact of 3.7% from foreign currency translation, partially offset by 2.8% net unfavorable impact of acquisitions and divestitures. Also, the top line surpassed the Zacks Consensus Estimate of $548.6 million.

On a regional basis, revenues from the United States increased 7.4% year over year to $202.9 million. Revenues generated from operations in Japan fell 11.8% to $27.8 million, while that from the Asia Pacific region increased 15.5% to $157.4 million. Revenues generated from Europe rose 15% to $156.5 million and that in the Americas increased 22.5% to $44.9 million.

The company reports under Industrial Precision Solutions and Advanced Technology Solutions. A brief discussion on the segmental performance in the quarter under review is provided below:

Industrial Precision Solutions’ revenues totaled $298.8 million, up 5.8% year over year. The segment gained from an 8.3% rise in volumes and 4.8% positive impact of foreign currency translation, partially offset by 7.3% net unfavorable impact of acquisitions and divestitures.

Advanced Technology Solutions’ revenues were $290.8 million, up 17.6% year over year. The increase was backed by 12.7% rise in volumes, and positive impacts of 2.4% and 2.5% from acquisitions and foreign currency translation, respectively.

Margin Profile

In the fiscal second quarter, Nordson’s cost of sales increased 5% to $251.8 million on a year-over-year basis. It represented 42.7% of net sales in the quarter compared with 45.3% in the year-ago quarter. Selling and administrative expenses increased 4.1% to $171.3 million. It represented 29.1% of net sales in the reported quarter compared with 31.1% in the year-ago quarter.

Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter were $191.7 million, up 25.8%.

Adjusted operating profits increased 32.7% to $166.4 million, while margin came in at 28% compared with 24% in the year-ago quarter.

Balance Sheet & Cash Flow

Exiting the fiscal second quarter, Nordson’s cash and cash equivalents were $133.3 million, down from $225.7 million at the end of the previous quarter. The company’s long-term debt declined 15.5% sequentially to $829 million.

In the first six months of fiscal 2021, the company generated net cash of $247.7 million from operating activities, reflecting a year-over-year increase of 13.5%. Capital spent on the addition of property, plant and equipment fell 27.5% to $18.7 million.

During the first six months of fiscal 2021, the company used $30.3 million to buy back shares and pay out dividends amounting to $45.3 million.

Outlook

For fiscal 2021 (ending January 2022), Nordson anticipates adjusted earnings of $7.20-$7.50, indicating growth of 31-37% on a year-over-year basis. For the fiscal year, the company expects year-over-year sales growth of 8-10%.

Nordson Corporation Price, Consensus and EPS Surprise

Nordson Corporation Price, Consensus and EPS Surprise

Nordson Corporation price-consensus-eps-surprise-chart | Nordson Corporation Quote

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the same space are Tennant Company (TNC - Free Report) , Barnes Group, Inc. (B - Free Report) and Dover Corporation (DOV - Free Report) . While Tennant currently sports a Zacks Rank #1 (Strong Buy), Barnes and Dover carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Tennant delivered an earnings surprise of 140.84%, on average, in the trailing four quarters.

Barnes delivered an earnings surprise of 19.45%, on average, in the trailing four quarters.

Dover delivered an earnings surprise of 21.35%, on average, in the trailing four quarters.

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