Nordson (NDSN) Q4 Earnings Beat Estimates, Revenues Rise Y/Y
Nordson Corporation’s NDSN fourth-quarter fiscal 2023 (ended Oct 31, 2023) adjusted earnings (excluding 24 cents from non-recurring items) of $2.46 per share surpassed the Zacks Consensus Estimate of $2.40 per share. The bottom line increased 0.8% year over year.
Revenue Details
In the reported quarter, Nordson’s revenues were $719.3 million, increasing 5.2% from the year-ago fiscal quarter’s number due to solid momentum in the Industrial Precision Solutions segment. Revenues beat the Zacks Consensus Estimate of $707 million.
Organic sales declined 3.1% due to softness in electronics dispense and biopharma product lines. Acquisitions/divestitures had a positive impact of 6.9% while foreign currency translation had a positive impact of 1.4%.
On a regional basis, revenues from the Asia Pacific region increased 2.4% to $219.4 million. Revenues generated from Europe increased 11.2% to $184.3 million while the metric in the Americas increased 3.9% to $315.6 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 $405.4 million in the quarter under review, up 14% from the year-ago fiscal quarter’s level. The segment contributed 56.4% to NDSN’s top line in the quarter.
Organic sales increased 4.4% from the year-ago fiscal quarter’s level. Foreign currency translation had a positive impact of 2.4%.
Revenues from Medical and Fluid Solutions amounted to $168.6 million in the quarter under review, down 7% from the year-ago fiscal quarter’s level. The segment contributed 23.4% to NDSN’s top line in the reported quarter.
Organic sales decreased 7.6% from the year-ago fiscal quarter’s level.
Advanced Technology Solutions’ sales were $145.2 million, down 0.9% from the year-ago fiscal quarter’s figure. The metric represented 20.2% of Nordson’s revenues in the period.
Organic sales decreased 16.4% from the year-ago fiscal quarter’s level. Acquisitions/divestitures had a positive impact of 15% while foreign currency translation had a positive impact of 0.5%.
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 4.6% from the year-ago fiscal quarter’s level to $335.2 million. Gross profit was $384.1 million, up 5.8% from the year-ago fiscal quarter’s level. The gross margin increased 30 basis points to 53.4%.
Selling and administrative expenses increased 7.3% year over year to $199.1 million. Adjusted EBITDA was $227.1 million, the margin being 32%. The adjusted operating income in the reported quarter was $195.8 million, increasing 10.3% year on year. The adjusted operating margin of 27% increased 100 bps from the year-ago period.
Net interest expenses totaled $25.9 million, reflecting a 408.8% increase from the year-ago fiscal quarter’s level.
Balance Sheet & Cash Flow
At the time of exiting fiscal 2023, Nordson’s cash and cash equivalents were $115.7 million compared with $163.5 million recorded at the end of the fourth quarter of fiscal 2022. Long-term debt was $1,621.4 million compared with $345.3 million recorded at the end of the fourth quarter of fiscal 2022.
In fiscal 2023, NDSN generated net cash of $641.3 million from operating activities, up 25% from the last fiscal year’s tally. Capital invested in purchasing property, plant and equipment totaled $34.6 million, decreasing 32.8% from the year-ago fiscal period.
Dividends & Share Buyback
In fiscal 2023, Nordson paid out dividends amounting to $150.4 million, up 19.4% from $125.9 million in the same period of the previous fiscal year.
Nordson’s treasury purchase shares amounted to $89.7 million in fiscal 2023, decreasing from $262.9 million in the last fiscal year.
Fiscal 2024 Outlook
For fiscal 2024 (ending October 2024), Nordson anticipates adjusted earnings to increase 1-8% from the year-ago period. Sales are expected to increase 4-9% from the previous fiscal year’s reported number.
Zacks Rank & Stocks to Consider
Nordson currently carries a Zacks Rank #3 (Hold). Some better-ranked companies from the Industrial Products sector are discussed below:
Flowserve Corporation FLS presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
FLS delivered a trailing four-quarter average earnings surprise of 27.3%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2023 earnings has increased 3.1%. The stock has risen 38.4% in the past year.
Applied Industrial Technologies, Inc. AIT presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 13.9%.
The consensus estimate for AIT’s fiscal 2024 earnings has increased 3.3% in the past 60 days. Shares of Applied Industrial have jumped 40.9% in the past year.
A. O. Smith Corporation AOS currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 14%.
In the past 60 days, the consensus estimate for A. O. Smith’s 2023 earnings has improved 4.4%. The stock has risen 43.8% in the past year.
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