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Nordson (NDSN) Q1 Earnings & Revenues Surpass Estimates

Nordson Corporation NDSN reported better-than-expected first quarter of fiscal 2021 (ended Jan 31, 2021) results. Quarterly earnings and sales surpassed the Zacks Consensus Estimate by 24.5% and 3.5%, respectively.

Adjusted earnings, excluding one-time charges and gains, in the reported quarter were $1.32 per share, surpassing the consensus estimate of $1.06. The bottom line increased 48% from the year-ago figure of 89 cents owing to growth in sales.

Revenue Details

In the reported quarter, Nordson’s net sales were $527 million, up 6% year over year. The top line benefited from a 3% improvement in organic volumes, and a positive impact of 3% positive impact of foreign currency translation and acquisitions. Notably, the top line surpassed the Zacks Consensus Estimate of $509 million.

At the end of the reported quarter, backlog was $495 million.

On a regional basis, revenues from the United States fell 1.7% year over year to $185.3 million. Revenues generated from operations in Japan dropped 1.6% to $27.1 million, while that from the Asia Pacific region increased 17.7% to $142.8 million. Revenues generated from Europe rose 6.9% to $135.2 million and that in the Americas increased 16.3% to $36.1 million.

The company reports under Industrial Precision Solutions and Advanced Technology Solutions. A brief discussion on the segmental performance in the quarter under review is provided below:

The Industrial Precision Solutions segment’s revenues totaled $288.4 million, up 9.3% year over year. The segment gained from a 6% rise in volumes and 3% positive impact of foreign currency translation.

Advanced Technology Solutions’ revenues were $238.2 million, up 3% year over year. The increase was backed by the positive impact of 2% from acquisitions and 2% positive impact of foreign currency translation, partially offset by a 1% decline in volumes.

Margin Profile

In the fiscal first quarter, Nordson’s cost of sales increased 2% to $236.6 million on a year-over-year basis. It represented 44.9% of net sales in the quarter compared with 46.8% in the year-ago quarter. Selling and administrative expenses contracted 3.8% to $180.9 million. It represented 34.4% of net sales in the reported quarter compared with 38% in the year-ago quarter.

Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter were $135 million, up 26.2%.

Adjusted operating profits increased 39% to $109 million, while the margin came in at 20.7% compared with 15.8% in the year-ago quarter.

Balance Sheet & Cash Flow

Exiting the fiscal first quarter, Nordson’s cash and cash equivalents were $225.7 million, up from $208.3 million at the end of the previous quarter. The company’s long-term debt declined 8.1% sequentially to $981.3 million.

In first three months of fiscal 2021, the company generated net cash of $143.3 million from operating activities, reflecting a year-over-year increase of 23.2%. Capital spent on the addition of property, plant and equipment fell 43.2% to $7.9 million.

During first three months of fiscal 2021, the company used $5.3 million to buy back shares and pay out dividends amounting to $22.7 million.

Outlook

For fiscal 2021 (ending January 2022), Nordson anticipates adjusted earnings growth of 15-22% on a year-over-year basis. For the fiscal year, the company expects year-over-year sales growth of 4-6%.

Nordson Corporation Price, Consensus and EPS Surprise

 

Nordson Corporation price-consensus-eps-surprise-chart | Nordson Corporation Quote

 

Zacks Rank & Other Stocks to Consider

The company currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks are iRobot Corporation IRBT, Franklin Electric Co., Inc. FELE and Emerson Electric Co. EMR. While iRobot sports a Zacks Rank #1 (Strong Buy), Franklin Electric and Emerson carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

iRobot has a trailing four-quarter earnings surprise of 228.19%, on average.

Franklin Electric has a trailing four-quarter earnings surprise of 19.15%, on average.

Emerson has a trailing four-quarter earnings surprise of 21.53%, on average.

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