We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Applied Industrial Technologies, Inc. (AIT - Free Report) reported encouraging third-quarter fiscal 2022 (ended Mar 31, 2022) results. Sales beat the consensus estimate by 6.1%.
AIT’s adjusted earnings in the fiscal third quarter were $1.75 per share. The bottom line increased 27.7% from the year-ago figure of $1.37.
Revenue Details
In the reported quarter, Applied Industrial’s net sales amounted to $980.7 million, up 16.6% year over year. The results benefited from 14.7% growth in organic sales, 0.4% gains from acquisitions and a 1.6% upside from one extra selling day. The increase was partially offset by an adverse impact of 0.1% from foreign currency translation.
AIT’s top line surpassed the Zacks Consensus Estimate of $924 million.
Applied Industrial reports revenues under two market segments. A brief discussion on the quarterly results is provided below:
Service Center-Based Distribution’s revenues totaled $659 million, which contributed 68% to net revenues in the quarter under review. On a year-over-year basis, the segment’s revenues increased 15.1%. Organic sales grew 13.6% and one additional selling day had a positive impact of 1.6%. Foreign currency translation had a negative impact of 0.2%. Improvement in the top line was backed by the break-fix MRO activity and a ramp-up of sales process initiatives.
The Fluid Power & Flow Control segment generated revenues of $321.7 million, contributing 32% to net revenues in the reported quarter. The figure increased 20% year over year on the back of 17.1% growth in organic sales and a 1.3% gain from acquisitions. One additional selling day had a positive impact of 1.6%. Businesses flourished in the technology, life sciences, off-highway mobile, chemical and machinery markets.
Applied Industrial Technologies, Inc. Price, Consensus and EPS Surprise
In the reported quarter, Applied Industrial’s cost of sales increased 16.8% year over year to $693.3 million. Cost of sales was 70.7% of the quarter’s net sales. Gross profit in the quarter grew 16.2% year over year to $287.3 million, while gross margin decreased 10 basis points (bps) to 29.4%.
Selling, distribution and administrative expenses (including depreciation) increased 10.8% year over year to $191.5 million. The same represented 19.5% of net sales in the reported quarter compared with 20.5% in the year-ago quarter. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were $108.6 million, reflecting growth of 25.1%. Margin increased 80 bps to 11.1%. Interest expenses declined 22.4% year over year to $5.9 million.
Balance Sheet & Cash Flow
Exiting the third quarter of fiscal 2022, Applied Industrial had cash and cash equivalents of $188.1 million, up 21.5% from $154.8 million recorded in the last reported quarter. Long-term debt was $681.2 compared with $681.3 million reported in the previous quarter.
In the nine months of fiscal 2022, AIT repaid long-term debts of $550.4 million compared with $82.1 million in the year-ago period. During the same period, Applied Industrial generated net cash of $133.8 million from operating activities, reflecting a decrease of 34.2% from the year-ago period’s level. Capital expenditures totaled $11.7 million, down 4.1% year over year. Free cash flow in the nine months of fiscal 2022 decreased 36.1% to $122.1 million.
In the nine months of fiscal 2022, Applied Industrial rewarded its shareholders with a dividend payout of $38.6 million. The amount represents growth of 2.1% year over year. Also, AIT repurchased shares worth $13.6 million in the same period. Exiting the third quarter of fiscal 2022, AIT is left to repurchase 317,960 shares.
Outlook
For fiscal 2022 (ending June 2022), Applied Industrial is expected to benefit from efficient inventory management, operational execution and margin initiatives. However, supply-chain constraints and inflationary issues are concerning.
Applied Industrial expects total revenues to increase 14.8-15.3% for fiscal 2022 (higher than 11.5-12.5% growth predicted earlier). Organic sales growth for the full fiscal is predicted to be 13.6-14.1%, higher than 10.5-11.5% growth guided earlier.
EBITDA margin is expected to be 10.5-10.6% (compared with 10.1-10.3% predicted earlier). Earnings per share are estimated to be $6.15-$6.25 for fiscal 2022 (compared with $5.70-$5.90 guided previously).
Zacks Rank & Stocks to Consider
AIT currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the industrial products sector are discussed below.
In the past 60 days, estimates for ROP earnings have increased 0.8% for 2022. The stock has increased 10.6% in the past three months.
Donaldson Company, Inc. (DCI - Free Report) presently carries a Zacks Rank of 2. DCI delivered a trailing four-quarter earnings surprise of 4.2%, on average.
Earnings estimates for DCI have increased 0.7% for fiscal 2022 (ending July 2022) in the past 60 days. Its shares have decreased 8.8% in the past three months.
Ferguson plc (FERG - Free Report) is presently Zacks #2 Ranked. FERG’s earnings surprise in the last four quarters was 14.2%, on average.
In the past 60 days, the stock’s earnings estimates have increased 7% for fiscal 2022 (ending July 2022). The same has declined 19.7% in the past three months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Applied Industrial's (AIT) Q3 Revenues Surpass Estimates
Applied Industrial Technologies, Inc. (AIT - Free Report) reported encouraging third-quarter fiscal 2022 (ended Mar 31, 2022) results. Sales beat the consensus estimate by 6.1%.
AIT’s adjusted earnings in the fiscal third quarter were $1.75 per share. The bottom line increased 27.7% from the year-ago figure of $1.37.
Revenue Details
In the reported quarter, Applied Industrial’s net sales amounted to $980.7 million, up 16.6% year over year. The results benefited from 14.7% growth in organic sales, 0.4% gains from acquisitions and a 1.6% upside from one extra selling day. The increase was partially offset by an adverse impact of 0.1% from foreign currency translation.
AIT’s top line surpassed the Zacks Consensus Estimate of $924 million.
Applied Industrial reports revenues under two market segments. A brief discussion on the quarterly results is provided below:
Service Center-Based Distribution’s revenues totaled $659 million, which contributed 68% to net revenues in the quarter under review. On a year-over-year basis, the segment’s revenues increased 15.1%. Organic sales grew 13.6% and one additional selling day had a positive impact of 1.6%. Foreign currency translation had a negative impact of 0.2%. Improvement in the top line was backed by the break-fix MRO activity and a ramp-up of sales process initiatives.
The Fluid Power & Flow Control segment generated revenues of $321.7 million, contributing 32% to net revenues in the reported quarter. The figure increased 20% year over year on the back of 17.1% growth in organic sales and a 1.3% gain from acquisitions. One additional selling day had a positive impact of 1.6%. Businesses flourished in the technology, life sciences, off-highway mobile, chemical and machinery markets.
Applied Industrial Technologies, Inc. Price, Consensus and EPS Surprise
Applied Industrial Technologies, Inc. price-consensus-eps-surprise-chart | Applied Industrial Technologies, Inc. Quote
Margin Profile
In the reported quarter, Applied Industrial’s cost of sales increased 16.8% year over year to $693.3 million. Cost of sales was 70.7% of the quarter’s net sales. Gross profit in the quarter grew 16.2% year over year to $287.3 million, while gross margin decreased 10 basis points (bps) to 29.4%.
Selling, distribution and administrative expenses (including depreciation) increased 10.8% year over year to $191.5 million. The same represented 19.5% of net sales in the reported quarter compared with 20.5% in the year-ago quarter. Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were $108.6 million, reflecting growth of 25.1%. Margin increased 80 bps to 11.1%. Interest expenses declined 22.4% year over year to $5.9 million.
Balance Sheet & Cash Flow
Exiting the third quarter of fiscal 2022, Applied Industrial had cash and cash equivalents of $188.1 million, up 21.5% from $154.8 million recorded in the last reported quarter. Long-term debt was $681.2 compared with $681.3 million reported in the previous quarter.
In the nine months of fiscal 2022, AIT repaid long-term debts of $550.4 million compared with $82.1 million in the year-ago period. During the same period, Applied Industrial generated net cash of $133.8 million from operating activities, reflecting a decrease of 34.2% from the year-ago period’s level. Capital expenditures totaled $11.7 million, down 4.1% year over year. Free cash flow in the nine months of fiscal 2022 decreased 36.1% to $122.1 million.
In the nine months of fiscal 2022, Applied Industrial rewarded its shareholders with a dividend payout of $38.6 million. The amount represents growth of 2.1% year over year. Also, AIT repurchased shares worth $13.6 million in the same period. Exiting the third quarter of fiscal 2022, AIT is left to repurchase 317,960 shares.
Outlook
For fiscal 2022 (ending June 2022), Applied Industrial is expected to benefit from efficient inventory management, operational execution and margin initiatives. However, supply-chain constraints and inflationary issues are concerning.
Applied Industrial expects total revenues to increase 14.8-15.3% for fiscal 2022 (higher than 11.5-12.5% growth predicted earlier). Organic sales growth for the full fiscal is predicted to be 13.6-14.1%, higher than 10.5-11.5% growth guided earlier.
EBITDA margin is expected to be 10.5-10.6% (compared with 10.1-10.3% predicted earlier). Earnings per share are estimated to be $6.15-$6.25 for fiscal 2022 (compared with $5.70-$5.90 guided previously).
Zacks Rank & Stocks to Consider
AIT currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the industrial products sector are discussed below.
Roper Technologies, Inc. (ROP - Free Report) presently has a Zacks Rank #2 (Buy). Its earnings surprise in the last four quarters was 2%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, estimates for ROP earnings have increased 0.8% for 2022. The stock has increased 10.6% in the past three months.
Donaldson Company, Inc. (DCI - Free Report) presently carries a Zacks Rank of 2. DCI delivered a trailing four-quarter earnings surprise of 4.2%, on average.
Earnings estimates for DCI have increased 0.7% for fiscal 2022 (ending July 2022) in the past 60 days. Its shares have decreased 8.8% in the past three months.
Ferguson plc (FERG - Free Report) is presently Zacks #2 Ranked. FERG’s earnings surprise in the last four quarters was 14.2%, on average.
In the past 60 days, the stock’s earnings estimates have increased 7% for fiscal 2022 (ending July 2022). The same has declined 19.7% in the past three months.