Back to top

Image: Bigstock

Nordson (NDSN) Q3 Earnings & Revenues Top Estimates, Up Y/Y

Read MoreHide Full Article

Nordson Corporation (NDSN - Free Report) reported better-than-expected third-quarter fiscal 2021 (ended Jul 31, 2021) results. Earnings and sales surpassed the Zacks Consensus Estimate by 14.2% and 7.3%, respectively.

Adjusted earnings, excluding one-time charges and gains, in the reported quarter were $2.42 per share, surpassing the consensus estimate of $2.12. Also, the bottom line increased 70% from the year-ago figure of $1.42 owing to sales growth.

Revenue Details

In the reported quarter, Nordson’s net sales were $646.9 million, up 20.2% year over year. The top line benefited from a 20.2% improvement in organic volumes, and a positive impact of 3.8% from foreign currency translation, partially offset by 3.8% net unfavorable impact of acquisitions and divestitures. The top line surpassed the Zacks Consensus Estimate of $603 million.

Nordson Corporation Price, Consensus and EPS Surprise

Nordson Corporation Price, Consensus and EPS Surprise

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

On a regional basis, revenues from the United States increased 9.8% year over year to $201.5 million. Revenues from operations in Japan fell 20.1% to $24.9 million, while that from the Asia Pacific region increased 37.4% to $210.4 million. Revenues generated from Europe rose 22.9% to $162.3 million and that in the Americas increased 24.7% to $47.7 million.

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

Industrial Precision Solutions’ revenues totaled $345.5 million, up 19.5% year over year. The segment gained from a 22.4% rise in volumes and a 5.1% positive impact of foreign currency translation, partially offset by an 8% net unfavorable impact of acquisitions and divestitures.

Advanced Technology Solutions’ revenues were $301.4 million, up 20.9% year over year. The increase was backed by a 17.8% rise in volumes, and positive impacts of 0.8% and 2.3% from acquisitions and foreign currency translation, respectively.

Margin Profile

In the fiscal third quarter, Nordson’s cost of sales increased 9.4% to $281.6 million on a year-over-year basis. It represented 43.5% of net sales in the quarter compared with 47.8% in the year-ago quarter. Selling and administrative expenses increased 4.9% to $177 million. It represented 27.4% of net sales in the reported quarter compared with 31.4% in the year-ago quarter.

Adjusted earnings before interest, tax, depreciation and amortization in the quarter were $215.2 million, up 45.2%.

Adjusted operating profits increased 57.3% to $188.3 million, while margin came in at 29.1% compared with 22.2% in the year-ago quarter.

Balance Sheet & Cash Flow

Exiting the fiscal third quarter, Nordson’s cash and cash equivalents were $174.2 million, up from $133.3 million at the end of the previous quarter. The company’s long-term debt declined 4.7% sequentially to $789.7 million.

In the first nine months of fiscal 2021, the company generated net cash of $375.5 million from operating activities, reflecting a year-over-year increase of 21.1%. Capital spent on the addition of property, plant and equipment fell 22.2% to $28.1 million.

During the first nine months of fiscal 2021, the company used $46.8 million to buy back shares and pay out dividends amounting to $68 million.

Outlook

For fiscal 2021 (ending January 2022), Nordson anticipates adjusted earnings of $7.75-$7.95, higher than $7.20-$7.50 predicted earlier. The figure indicates growth of 41-45% on a year-over-year basis.

For the fiscal year, the company expects year-over-year sales growth of 11-12% compared with rise of 8-10% guided earlier.

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks from the same space are Applied Industrial Technologies, Inc. (AIT - Free Report) , Dover Corporation (DOV - Free Report) and IDEX Corporation (IEX - Free Report) . All these companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Applied Industrial pulled off an earnings surprise of 32.91%, on average, in the trailing four quarters.

Dover pulled off an earnings surprise of 17.59%, on average, in the trailing four quarters.

IDEX pulled off an earnings surprise of 6.73%, on average, in the trailing four quarters.