Applied Posts Flat Q2 Sales & Profit, But Rebounds From Q1

The company's organic sales improved 0.4 percent in Q2, leading it to raise the lower end of its previously 2017 full year outlook.

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Cleveland, OH-based Applied Industrial Technologies — No. 15 on Industrial Distribution's Big 50 List — reported its fiscal results for its 2017 second quarter on Thursday, led by flat year-over-year sales and profit, while the company raised the lower end of its previous 2017 outlook.

Applied posted Q2 sales of $608.1 million, down 0.4 percent from a year earlier. The quarter had one less selling day than in 2015, which accounted for a 1.6 percent total sales decline and a negative currency headwind impact of 0.5 percent, while the company's organic sales improved 0.4 percent. Applied also had 1.3 percent growth from acquisition-related volume.

The organic sales gain was a rebound from a 4.8 percent decline in Q1, when it also had a 2.7 percent decline in total sales.

Q2 operating profit of $37.7 million was down 1.8 percent year-over-year, while total profit of $24.1 million was up slightly from $23.9 million a year earlier.

Neil Schrimsher, Applied Industrial Technologies President & CEONeil Schrimsher, Applied Industrial Technologies President & CEO

For the six-month period ended Dec. 31, Applied sales of $1.23 billion were down 1.5 percent year-over-year, while profit of $51.5 million increased 6.8 percent.

"Midway through our fiscal year, we are pleased with the continued operational enhancements and efficiencies throughout our organization," Applied president and CEO Neil Schrimsher said. "We are also encouraged by the improving sales per day developments and remain focused on expanding our capabilities with new and existing customers."

Applied updated its 2017 full year sales outlook, forecasting a range of negative -2.0 percent to +1.0 percent, raising the range's lower end of -3.0 percent it forecasted after Q1.

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