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 (AIT - Free Report) reported fourth-quarter fiscal 2023 (ended Jun 30, 2023) earnings of $2.35 per share, beating the Zacks Consensus Estimate of earnings of $2.18 per share. The bottom line jumped 16.3% year over year.
Net sales of $1,158.1 million also outperformed the consensus estimate of $1,117 million. The top line jumped 9.1% year over year. Acquisitions boosted the top line by 0.7%, while foreign-currency woes had a negative impact of 0.2%. Organic sales increased 8.6%.
Segmental Discussion
The Service Center-Based Distribution segment’s revenues, which contributed 67.5% to net revenues, totaled $781.9 million in the quarter under review. Our estimate for segmental revenues was $749.7 million. On a year-over-year basis, the segment’s revenues increased 8.8%. Organic sales grew 9.1%. Foreign currency translation had a negative impact of 0.3%. Segmental revenues were driven by benefits from sales process initiatives, solid growth across national strategic accounts and incremental benefits from cross-selling actions.
The Engineered Solutions segment’s revenues (formerly Fluid Power & Flow Control segment), which contributed 32.5% to net revenues, totaled $376.2 million in the reported quarter. Our estimate for the Engineered Solutions segment’s revenues in the fiscal fourth quarter was $364.8 million. On a year-over-year basis, the segment’s revenues increased 9.7%. Acquisitions boosted the top line by 2.2%. Organic sales rose 7.5%, due to increasing underlying segment demand, robust technical and engineering capabilities, backlog and exposure to diverse end markets.
Applied Industrial Technologies, Inc. Price, Consensus and EPS Surprise
In the reported quarter, Applied Industrial’s cost of sales increased 8.6% year over year to $819.5 million. Gross profit in the quarter grew 10.4% year over year to $338.6 million, while the gross margin increased 35 basis points to 29.2%. Selling, distribution and administrative expenses (including depreciation) climbed 7.3% year over year to $211.7 million. EBITDA was $140 million, reflecting an increase of 16.7%.
Balance Sheet & Cash Flow
At the end of fiscal 2023, Applied Industrial had cash and cash equivalents of $344 million, compared with $184.5 million at the end of fiscal 2022. Long-term debt was $596.9 million, down 8% from fiscal 2022 end.
At the end of the reported quarter, Applied Industrial generated net cash of $344 million from operating activities, reflecting an increase of 83.4% from the year-ago period. Capital expenditures totaled $26.5 million, up 78.3% year over year. Free cash flow at the end of the reported quarter increased 17.3% year over year to $317.5 million.
In fiscal 2023, Applied Industrial rewarded shareholders with dividends of $53.4 million, up 3.2% year over year.
FY24 Outlook
For fiscal 2024, AIT expects adjusted earnings of $8.80-$9.55 per share. The mid-point of the guided range — $9.18 — lies above the Zacks Consensus Estimate of adjusted earnings of $8.92 per share. Sales are estimated to increase 0-4% year over year in fiscal 2024. The EBITDA margin is predicted to be 11.9-12.1% for the same period.
Zacks Rank & Other Stocks to Consider
AIT currently carries a Zacks Rank #2 (Buy). Some other top-ranked companies from the Industrial Products sector are discussed below:
CAT’s earnings surprise in the last four quarters was 18.5%, on average. In the past 60 days, estimates for Caterpillar’s earnings have increased 7.3% for 2023. The stock has gained 44.2% in the past year.
A. O. Smith Corp. (AOS - Free Report) presently carries a Zacks Rank of 2. AOS’ earnings surprise in the last four quarters was 10.5%, on average.
In the past 60 days, estimates for A. O. Smith’s earnings have increased 2.6% for 2023. The stock has gained 12.8% in the past year.
Alamo Group Inc. (ALG - Free Report) presently carries a Zacks Rank of 2. ALG’s earnings surprise in the last four quarters was 13%, on average.
In the past 60 days, estimates for Alamo’s 2023 earnings have increased 1.1%. The stock has gained 25.8% in the past year.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Applied Industrial (AIT) Q4 Earnings & Sales Beat, Rise Y/Y
Applied Industrial Technologies (AIT - Free Report) reported fourth-quarter fiscal 2023 (ended Jun 30, 2023) earnings of $2.35 per share, beating the Zacks Consensus Estimate of earnings of $2.18 per share. The bottom line jumped 16.3% year over year.
Net sales of $1,158.1 million also outperformed the consensus estimate of $1,117 million. The top line jumped 9.1% year over year. Acquisitions boosted the top line by 0.7%, while foreign-currency woes had a negative impact of 0.2%. Organic sales increased 8.6%.
Segmental Discussion
The Service Center-Based Distribution segment’s revenues, which contributed 67.5% to net revenues, totaled $781.9 million in the quarter under review. Our estimate for segmental revenues was $749.7 million. On a year-over-year basis, the segment’s revenues increased 8.8%. Organic sales grew 9.1%. Foreign currency translation had a negative impact of 0.3%. Segmental revenues were driven by benefits from sales process initiatives, solid growth across national strategic accounts and incremental benefits from cross-selling actions.
The Engineered Solutions segment’s revenues (formerly Fluid Power & Flow Control segment), which contributed 32.5% to net revenues, totaled $376.2 million in the reported quarter. Our estimate for the Engineered Solutions segment’s revenues in the fiscal fourth quarter was $364.8 million. On a year-over-year basis, the segment’s revenues increased 9.7%. Acquisitions boosted the top line by 2.2%. Organic sales rose 7.5%, due to increasing underlying segment demand, robust technical and engineering capabilities, backlog and exposure to diverse end 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 8.6% year over year to $819.5 million. Gross profit in the quarter grew 10.4% year over year to $338.6 million, while the gross margin increased 35 basis points to 29.2%. Selling, distribution and administrative expenses (including depreciation) climbed 7.3% year over year to $211.7 million. EBITDA was $140 million, reflecting an increase of 16.7%.
Balance Sheet & Cash Flow
At the end of fiscal 2023, Applied Industrial had cash and cash equivalents of $344 million, compared with $184.5 million at the end of fiscal 2022. Long-term debt was $596.9 million, down 8% from fiscal 2022 end.
At the end of the reported quarter, Applied Industrial generated net cash of $344 million from operating activities, reflecting an increase of 83.4% from the year-ago period. Capital expenditures totaled $26.5 million, up 78.3% year over year. Free cash flow at the end of the reported quarter increased 17.3% year over year to $317.5 million.
In fiscal 2023, Applied Industrial rewarded shareholders with dividends of $53.4 million, up 3.2% year over year.
FY24 Outlook
For fiscal 2024, AIT expects adjusted earnings of $8.80-$9.55 per share. The mid-point of the guided range — $9.18 — lies above the Zacks Consensus Estimate of adjusted earnings of $8.92 per share. Sales are estimated to increase 0-4% year over year in fiscal 2024. The EBITDA margin is predicted to be 11.9-12.1% for the same period.
Zacks Rank & Other Stocks to Consider
AIT currently carries a Zacks Rank #2 (Buy). Some other top-ranked companies from the Industrial Products sector are discussed below:
Caterpillar Inc. (CAT - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
CAT’s earnings surprise in the last four quarters was 18.5%, on average. In the past 60 days, estimates for Caterpillar’s earnings have increased 7.3% for 2023. The stock has gained 44.2% in the past year.
A. O. Smith Corp. (AOS - Free Report) presently carries a Zacks Rank of 2. AOS’ earnings surprise in the last four quarters was 10.5%, on average.
In the past 60 days, estimates for A. O. Smith’s earnings have increased 2.6% for 2023. The stock has gained 12.8% in the past year.
Alamo Group Inc. (ALG - Free Report) presently carries a Zacks Rank of 2. ALG’s earnings surprise in the last four quarters was 13%, on average.
In the past 60 days, estimates for Alamo’s 2023 earnings have increased 1.1%. The stock has gained 25.8% in the past year.