Applied Industrial Technologies, Inc. reports results for the quarter ended September 30 - Earnings Summary

What happened

Applied Industrial Technologies reported quarterly adjusted earnings of $2.97 per share, above the $2.63 reported a year earlier and the $2.89 average expected by eight analysts. Revenue rose 7.6% to $1.29 billion, matching analyst expectations, and quarterly net income was $110.4 million.

Confirmed

Global impact / market context

The company beat the profit figure analysts expected even though revenue only matched expectations. That means more of each sales dollar reached profit, which supports earnings quality. The stock's 2.3% fall this quarter despite a 26.4% year-to-date gain suggests investors had already priced in strong results.

Analyst inference

Analysts rate the shares a buy, with seven buy or strong buy ratings and two holds, and their median 12-month price target is $390.00, about 16.7% above the last close of $324.68. Earnings estimates rose about 1.7% over three months with no negative revisions in 30 days.

Analyst inference

What to watch

1. The mean analyst earnings estimate rose by about 1.7% over the last three months, and there were no negative revisions of earnings estimates in the last 30 days, indicating steadily firming expectations. Confirmed
2. Watch whether analysts lift their median 12-month price target of $390.00 after this earnings beat, because a higher target would imply more expected upside from the last closing price of $324.68. Proposed
3. Watch whether the revenue growth of 7.6% carries into coming quarters, since matching rather than beating revenue expectations suggests profit gains came more from cost control than from faster sales. Analyst inference

Evidence

• Original source link unavailable