Yahoo Finance Applied Industrial (AIT) Q3 Earnings and Sales Beat Estimates
Applied Industrial Technologies AIT reported third-quarter fiscal 2023 (ended Mar 31, 2023) earnings of $2.38 per share, beating the Zacks Consensus Estimate of earnings of $2.12 per share. Our estimate for fiscal third-quarter earnings was $2.05 per share. The bottom line jumped 36% year over year.
Net sales of $1,132 million also outperformed the Zacks Consensus Estimate of $1,103 million. Our estimate for net sales in the reported quarter was $1,086.5 million. The top line jumped 15.4% year over year. Acquisitions boosted the top line by 0.7%, while foreign-currency woes had a negative impact of 0.3%. Organic sales increased 15%.
Segmental Discussion
The Service Center-Based Distribution segment’s revenues, which contributed 67.3% to net revenues, totaled $761.6 million in the quarter under review. Our estimate for segmental revenues was $730.7 million. On a year-over-year basis, the segment’s revenues increased 15.6%. Organic sales grew 16.1%. Foreign currency translation had a negative impact of 0.5%. Segmental revenues were driven by benefits from sales process initiatives, pricing actions and moderating demand in certain end markets.
The Engineered Solutions segment’s revenues (formerly Fluid Power & Flow Control segment), which contributed 32.7% to net revenues, totaled $370.4 million in the reported quarter. Our estimate for the Engineered Solutions segment’s revenues in the fiscal third quarter was $355.8 million. On a year-over-year basis, the segment’s revenues increased 15.2 %. Organic sales increased 13.1%, due to 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 15.2% year over year to $798.9 million. Gross profit in the quarter grew 15.9% year over year to $333.1 million, while the gross margin increased 10 basis points to 29.4%. Selling, distribution and administrative expenses (including depreciation) climbed 7.7% year over year to $206.2 million. EBITDA was $140.3 million, reflecting an increase of 29.2%.
Balance Sheet & Cash Flow
At the end of third-quarter fiscal 2023, Applied Industrial had cash and cash equivalents of $182.1 million, compared with $184.5 million at the end of fiscal 2022. Long-term debt was $597 million, down 8% from fiscal 2022-end.
At the end of the reported quarter, Applied Industrial generated net cash of $164 million from operating activities, reflecting an increase of 22.6% from the year-ago period. Capital expenditures totaled $20.8 million, up 78.3% year over year. Free cash flow at the end of the reported quarter increased 17.3% year over year to $143.2 million.
In the first nine months of fiscal 2023, Applied Industrial rewarded shareholders with dividends of $39.8 million, up 3.2% year over year.
Dividend
Applied Industrial’s board approved a quarterly cash dividend of 35 cents per share, payable to shareholders on May 31, 2023, of record as of May 15, 2023.
2023 Outlook
For fiscal 2023, AIT expects adjusted earnings of $8.47-$8.60 per share, compared with the prior view of earnings of $8.10-$8.50 per share. The midpoint of the guided range of $8.54 per share implies a 1.8% jump from the fiscal 2022 figure of $8.39 per share. Sales are estimated to increase 14-15% year over year in fiscal 2023, compared with the 13-15% rise anticipated earlier. The EBITDA margin is predicted to be 11.7-11.8% for the same period, compared with 11.5-11.7% anticipated earlier.
Zacks Rank & Stocks to Consider
AIT currently carries a Zacks Rank #3 (Hold). Some top-ranked companies from the Industrial Products sector are discussed below:
Ingersoll Rand Inc. IR presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks.
IR’s earnings surprise in the last four quarters was 12.6%, on average. In the past 60 days, estimates for Ingersoll Rand’s 2023 earnings have increased 2%. The stock has rallied 13.3% in the past six months.
Parker-Hannifin Corporation PH presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of 12.4%, on average.
In the past 60 days, estimates for Parker-Hannifin’s fiscal 2023 (ending June 2023) earnings have increased 1.6%. The stock has gained 11.4% in the past six months.
Allegion plc ALLE presently carries a Zacks Rank of 2. ALLE’s earnings surprise in the last four quarters was 12.5%, on average.
In the past 60 days, Allegion’s earnings estimates have increased 4.1% for 2023. The stock has gained 1.2% in the past six months.
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Allegion PLC (ALLE) : Free Stock Analysis Report
