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Nordson shares soar on strong 3Q results, guidance

NEW YORK (AP) -- Shares of Nordson Corp. soared to a record high Tuesday, a day after the company reported an 18 percent jump in fiscal third-quarter net income that beat Wall Street predictions and issued a strong guidance for the current period.

THE SPARK: Nordson, which makes adhesives and industrial coatings, said that for the quarter ended July 31, it posted an adjusted profit of $1.06 per share, beating average analysts' predictions of 99 cents per share, according to FactSet.

Revenue grew 22 percent to $379.9 million, ahead of average analysts' expectations of $358.4 million.

The company said it expects an adjusted fourth-quarter net income of 98 cents to $1.06 per share on $408 million to $422 million in sales. Analysts expected a profit of 95 cents per share on $391.6 million in revenue.

THE BIG PICTURE: CEO Michael F. Hilton said in the company's earnings release that the fourth-quarter guidance was based on order rates that are running 15 percent ahead of last year and a backlog of work that has grown 49 percent.

For the third-quarter, sales at Nordson's adhesive-dispensing systems division rose 14 percent. Advanced-technology systems sales were up 37 percent and industrial coatings rose 9 percent.

THE ANALYSIS: KeyBanc analyst Matt Summerville backed his "Hold" rating for Nordson, but raised his full-year profit prediction for the company by 13 cents to $3.48, mainly as a result of the company's better-than expected volume growth and fourth-quarter guidance.

"We remain somewhat guarded in the near term despite Nordson's solid execution and strong overall order rates, noting the short-cycle nature of its business, and an unclear trajectory in Europe and China from a macro standpoint," Summerville wrote in a note to investors.

"However, this is well-balanced by our view that the company's businesses possess attractive, long-term secular growth potential, particularly within advanced technology."

THE SHARES: Up $6.31, or 11 percent in heavy midday trading, after peaking at $62.44 earlier in the day and passing their previous 52-week high of $59. The Westlake, Ohio-based company's shares have gained about 34 percent since the beginning of the year.