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Nordson (NDSN) Q4 Earnings & Revenues Miss Estimates, Rise Y/Y

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Nordson Corporation (NDSN - Free Report) reported weaker-than-expected results for the fourth quarter of fiscal 2021 (ended Oct 31, 2021). Its earnings lagged the Zacks Consensus Estimate by 10.48%. Also, sales in the quarter lagged estimates by 3.26%.

The company’s adjusted earnings were $1.88 per share in the reported quarter, lagging the Zacks Consensus Estimate of $2.10. On a year-over-year basis, the bottom line increased 18.2% from the year-ago quarter’s $1.59.

For fiscal 2021, the company’s adjusted earnings were $7.74 per share, increasing 41.2% from the previous year’s figure of $5.48. However, the bottom line lagged the Zacks Consensus Estimate of $7.96.

Revenue Details

In the reported quarter, Nordson’s revenues were $599.3 million, reflecting an increase of 7.3% from the year-ago number. Foreign currency translation had a positive impact of 0.6%. Organic sales in the reported quarter expanded 10.4%, driven by healthy end-market businesses, including industrial and electronics. Acquisitions/divestitures had a negative impact of 3.7%.

Also, the company’s revenues lagged the Zacks Consensus Estimate of $619.4 million.

On a regional basis, revenues from the United States increased 2.5% year over year to $199.5 million. Revenues from operations in Japan fell 23.7% to $27.7 million, while that from the Asia Pacific region increased 4.9% to $157.4 million. Revenues generated from Europe rose 15.1% to $163.6 million and that in the Americas increased 44% to $51 million.

Nordson reports revenues under two segments — Industrial Precision Solutions and Advanced Technology Solutions. A brief snapshot of the segmental sales is provided below:

Revenues generated from Industrial Precision Solutions amounted to $314.3 million, increasing 1.9% year over year. It represented 52.5% of the company’s revenues in the quarter.

Organic sales in the quarter expanded 8% year over year. Foreign currency translation had a positive impact of 0.5% and acquisitions/divestitures had a negative impact of 6.6%.

Advanced Technology Solutions’ sales were $284.9 million in the fourth quarter, up 13.9% from the year-ago reported quarter. It represented 47.5% of the company’s revenues in the quarter.

Organic sales increased 13.3% from the year-ago quarter and foreign currency translation had a positive impact of 0.6%.

For fiscal 2021, the company’s revenues were $2.36 billion, lagging the Zacks Consensus Estimate of $2.38 billion.

Margin Profile

In the reported quarter, Nordson’s cost of sales increased 2.5% year over year to $268.1 million. Notably, the cost of sales represented 44.7% of net sales. Gross profit was $331.2 million, up 11.5% year over year. The gross margin increased 210 basis points (bps) year over year to 55.3%. The company suffered from the adverse impacts of supply-chain woes and high logistic costs.

Selling and administrative expenses increased 4.4% year over year to $179.7 million and represented 30% of net sales. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $177.1 million, the margin being 30%. Adjusted operating income in the reported quarter increased 16.3% year over year to $151.4 million, with the adjusted operating margin growing 200 bps to 25.3%.

Net interest expenses totaled $4.5 million in the reported quarter, reflecting a decrease of 30.8% from the year-ago quarter.

Balance Sheet & Cash Flow

Exiting the quarter, Nordson’s cash and cash equivalents were $300 million, increasing 72.2% from $174.2 million recorded in the last reported quarter. Long-term debt was $781.7 million, reflecting a 1% decline from $789.7 million in the last reported quarter.

In fiscal 2021, the company repaid $289.4 million of long-term debts and $6.6 million of financial lease obligations.

In fiscal 2021, it generated net cash of $545.9 million from operating activities, up 8.7% from the previous year. Capital invested for purchasing property, plant and equipment totaled $38.3 million, decreasing 24.2% year over year.

Dividends/Share Buyback

In fiscal 2021, the company paid out dividends amounting to $97.7 million, up 10.6% from $88.4 million in the previous year.

On Dec 8, 2021, Nordson announced that its board of directors approved a quarterly dividend of 51 cents per share. The dividend payment for the first quarter of fiscal 2022 (ending January 2022) will be made on Jan 4, 2022, to shareholders of record as of Dec 21, 2021.

The purchase of treasury shares by Nordson amounted to $61 million in fiscal 2021, increasing 15.9% from the previous year.

Outlook

Nordson anticipates solid orders and backlog (of $800 million) to be beneficial in the first quarter of fiscal 2022 (ending January 2022). Pricing actions will also help mitigate the impacts of supply-chain and cost woes.

For the fiscal first quarter, the company predicts year-over-year sales growth of 14-16% and adjusted earnings of $1.80-$1.95 per share.

For fiscal 2022, Nordson anticipates year-over-year adjusted earnings growth of 8-18%. Sales are expected to increase 6-10% from the previous fiscal year’s reported number.

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

With a market capitalization of $15.4 billion, Nordson currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the industry are discussed below.

Helios Technologies, Inc. (HLIO - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Its earnings surprise in the last reported quarter was 30.49%. The same in the last four quarters was 37.54%, on average.

In the past 60 days, Helios’ earnings estimates have increased 7.9% for 2021 and 9.8% for 2022. HLIO’s shares have gained 14.6% in the past three months.

Ingersoll Rand Inc. (IR - Free Report) reported better-than-expected results in the last reported quarter, with earnings surpassing estimates by 23.91%. Its earnings surprise in the last four quarters was 19.78%, on average. The company presently carries a Zacks Rank #2 (Buy).

Ingersoll’s earnings estimates increased 11.7% for 2021 and 7.9% for 2022 in the past 60 days. IR’s shares have increased 9.6% in the past three months.

Applied Industrial Technologies, Inc.’s (AIT - Free Report) results in the last reported quarter were impressive, with earnings surpassing estimates by 14.29%. Its last four-quarter average earnings surprise was 26.71%. The company presently carries a Zacks Rank #2.

Applied Industrial’s earnings estimates have increased 1.9% for fiscal 2022 (ending June 2022) and 2.2% for fiscal 2023 (ending June 2023) in the past 60 days. AIT’s shares have gained 23.3% in the past three months.