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Dec 31, 2024
Applied Industrial Technologies Q2 2025 Earnings Report
Applied Industrial Technologies reported mixed results with increased EPS and EBITDA despite a slight decrease in net sales.
Key Takeaways
Applied Industrial Technologies reported a slight decrease in net sales by 0.4% year-over-year to $1.1 billion for the fiscal 2025 second quarter. However, the company's net income increased to $93.3 million, or $2.39 per share, and EBITDA rose to $135.1 million. The company is raising its fiscal year 2025 guidance to reflect the second quarter performance and the recent Hydradyne acquisition.
Net sales decreased 0.4% year-over-year to $1.1 billion, with a 3.4% decrease on an organic daily basis.
Net income increased to $93.3 million, or $2.39 per share, up 6.7% compared to the prior-year adjusted EPS.
EBITDA increased 3.3% year-over-year to $135.1 million.
Fiscal year 2025 guidance is raised to reflect Q2 performance and the Hydradyne acquisition, with EPS projected at $9.65 to $10.05 and sales growth of 1% to 3%.
Forward Guidance
Applied Industrial Technologies is raising its fiscal 2025 guidance, projecting EPS of $9.65 to $10.05 and sales growth of 1% to 3%.
Positive Outlook
- Updated guidance reflects second quarter performance.
- Guidance incorporates initial estimated contribution from the recent Hydradyne acquisition.
- Improving industrial macro indicators are expected to drive a growth inflection in end-market demand.
- Order momentum and business funnels are building across the technology vertical.
- Ongoing self-help margin opportunities and balance sheet capacity support the ability to accelerate sales and earnings growth.
Challenges Ahead
- Guidance assumes industrial activity remains muted near term due to economic policy uncertainty.
- A more gradual pace to interest rate cuts is expected.
- January sales are trending down by a mid single-digit percent on an organic basis over prior-year levels.
Historical Earnings Impact
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