Applied Industrial Technologies on Thursday reported a slight increase in sales but a decline in earnings in the first quarter of its new fiscal year.
The Cleveland-based industrial and fluid power distributor â no. 8 on IDâs 2024 Big 50 â posted $1.1 billion in net sales between July and September. Although that total was up 0.3% compared to the same quarter last year, recent acquisitions and an extra business day in the quarter bolstered the overall number; on an organic, daily average basis, sales slipped by 3%. The companyâs engineered solutions segment fell by just more than 6%, while the service center division declined by 1.4%.
Net income, meanwhile, came in at more than $92 million â down 1% year-over-year â while EBITDA slid more than 3% to $129 million.
Still, Applied executives said that Q1 revenue exceeded its expectations â and grew stronger in the final month of the quarter.
CEO Neil Schrimsher said in a statement that October sales were trending down by âa mid single-digit percentâ amid hurricane-related disruptions and âchoppyâ customer spending patterns. Moving forward, however, Schrimsher said that âself-help and secular tailwindsâ support âabove marketâ growth and continued margin expansion.
âCombined with easing interest rates and easier comparisons, we see ongoing potential for stronger sales and earnings trends as the year progresses,â Schrimsher said.
The company also expects to increase capital spending â including potential âstrategic bolt-on and mid-size acquisitions.â
Applied maintained its earlier full-year sales projections of between a 2.5% decline and a 2.5% increase, but it slightly raised its earnings outlook from $9.20 to $9.95 per share up to $9.25 to $10 per share.
