Yahoo Finance Nordson (NDSN) Q1 Earnings and Revenues Miss Estimates
Nordson Corporation NDSN reported lackluster first-quarter fiscal 2023 (ended Jan 31, 2023) results, wherein earnings missed the Zacks Consensus Estimate by 1.5% and sales lagged the same by 2.1%.
NDSN’s adjusted earnings were $1.95 per share in the reported quarter, missing the Zacks Consensus Estimate of $1.98. The bottom line decreased 5.8% from $2.07 in the year-ago quarter.
Revenue Details
In the reported quarter, Nordson’s revenues were $610.5 million, reflecting an increase of 0.2% from the year-ago quarter. Revenues missed the Zacks Consensus Estimate of $623 million.
Organic sales expanded 1%, driven by combined growth in Europe and the Americas. Acquisitions/divestitures had a positive impact of 3%, while foreign currency translation had a negative impact of 4%.
On a regional basis, revenues from the Asia Pacific region decreased 14.4% to $182.7 million. Revenues generated from Europe increased 4.5% to $162.9 million, while the metric in the Americas increased 10.4% to $264.9 million.
Nordson started reporting revenues under three segments, effective Aug 1, 2022. The segments are Industrial Precision Solutions, Medical and Fluid Solutions, and Advanced Technology Solutions. A brief snapshot of the segmental sales is provided below:
Revenues from Industrial Precision Solutions amounted to $311.5 million in the quarter under review, down 3.8% from the year-ago quarter. The segment contributed 51% to NDSN’s top line in the quarter.
Organic sales increased 1.2% from the year-ago quarter. Foreign currency translation had a negative impact of 5%.
Revenues from Medical and Fluid Solutions amounted to $154.3 million in the quarter under review, down 2.8% from the year-ago quarter. The segment contributed 25.3% to NDSN’s top line in the reported quarter.
Organic sales decreased 0.8% from the year-ago quarter, while foreign currency translation had a negative impact of 2%.
Advanced Technology Solutions’ sales were $144.6 million, up 14.4% from the year-ago quarter. The metric represented 23.7% of Nordson’s revenues in the period.
Organic sales increased 4.6% from the year-ago quarter. Acquisitions/divestitures had a positive impact of 13.5%, while foreign currency translation had a negative impact of 3.7%.
Nordson Corporation Price, Consensus and EPS Surprise
Nordson Corporation price-consensus-eps-surprise-chart | Nordson Corporation Quote
Margin Profile
In the reported quarter, Nordson’s cost of sales increased 4.7% from the year-ago quarter to $281.6 million. The cost of sales represented 46.1% of net sales. Gross profit was $328.9 million, down 3.3% from the year-ago quarter. The gross margin contracted 190 basis points (bps) to 53.9%. NDSN suffered the impacts of supply-chain woes and labor shortages.
Selling and administrative expenses increased 0.2% year over year to $184.6 million and represented 30.2% of net sales. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $180.9 million, the margin being 30%. The adjusted operating income in the reported quarter was $154.5 million, decreasing 1.8% year over year. The adjusted operating margin decreased 100 bps to 25%.
Net interest expenses totaled $9.9 million, reflecting a 90.4% increase from the year-ago quarter.
Balance Sheet & Cash Flow
Exiting the fiscal first quarter, Nordson’s cash and cash equivalents reached $122 million, decreasing 25.4% from the $163.5 million recorded at the end of the fourth quarter of fiscal 2022. Long-term debt was $595.2 million, reflecting a 72.4% increase from $345.3 million.
In the first three months of fiscal 2023, NDSN generated net cash of $123.3 million from operating activities, down 4.4% from the prior-year figure. Capital invested in purchasing property, plant and equipment totaled $9.3 million, decreasing 25.6% from the year-ago period.
Dividends/Share Buyback
In the first three months of fiscal 2023, Nordson paid out dividends amounting to $37.2 million, up 25.3% from $29.7 million in the same period of the previous year.
Nordson’s treasury purchase shares amounted to $6.9 million in the first three months of fiscal 2023, decreasing from $35 million in the previous year.
Outlook
For fiscal 2023 (ending October 2023), Nordson anticipates adjusted earnings of $8.75-$9.50 per share compared with $8.75-$10.10 per share stated earlier. Sales are expected to increase 0-3% from the previous year’s reported number compared with 1-7% mentioned earlier.
Zacks Rank & Other Stocks to Consider
NDSN currently has a Zacks Rank #2 (Buy). Some other top-ranked companies from the Industrial Products sector are discussed below:
Allegion plc ALLE presently carries a Zacks Rank of 2. ALLE’s earnings surprise in the last four quarters was 8.8%, on average. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks.
In the past 60 days, Allegion’s earnings estimates have been unchanged for 2022. The stock has gained 15% in the past six months.
A. O. Smith Corporation AOS presently has a Zacks Rank of 2 and a trailing four-quarter earnings surprise of 3.2%, on average.
AOS’ earnings estimates have increased 4.1% for 2023 in the past 60 days. Shares of A. O. Smith have risen 9.7% in the past six months.
Valmont Industries, Inc. VMI presently has a Zacks Rank of 2. VMI’s earnings surprise in the last four quarters was 12.5%, on average.
In the past 60 days, Valmont’s earnings estimates have been unchanged for 2022. The stock has rallied 15.8% in the past six months.
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Allegion PLC (ALLE) : Free Stock Analysis Report
