Applied Industrial Technologies Meets on the Top Line, Misses Where it Counts

Applied Industrial Technologies (NYS: AIT) reported earnings on Jan. 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Applied Industrial Technologies met expectations on revenues and missed on earnings per share.

Compared to the prior-year quarter, revenue expanded and earnings per share was unchanged.

Gross margins improved, operating margins contracted, and net margins shrank.

Revenue details
Applied Industrial Technologies reported revenue of $570.4 million. The six analysts polled by S&P Capital IQ expected a top line of $567.1 million. Sales were 7.7% higher than the prior-year quarter's $529.5 million.


Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
EPS came in at $0.49. The six earnings estimates compiled by S&P Capital IQ averaged $0.54 per share. GAAP EPS of $0.49 for Q2 were 0% lower than the prior-year quarter's $0.49 per share.


Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 27.3%, 10 basis points better than the prior-year quarter. Operating margin was 5.8%, 40 basis points worse than the prior-year quarter. Net margin was 3.7%, 30 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $596.6 million. On the bottom line, the average EPS estimate is $0.62.

Next year's average estimate for revenue is $2.35 billion. The average EPS estimate is $2.44.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 253 members out of 263 rating the stock outperform, and 10 members rating it underperform. Among 99 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 99 give Applied Industrial Technologies a green thumbs-up, and none give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Applied Industrial Technologies is hold, with an average price target of $36.67.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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