Diversified machinery maker Nordson Corp. (NDSN) on Thursday reported a 5 percent increase in profit for the second quarter, reflecting double-digit revenue growth across all three of its segments and the absence of restructuring charges compared to last year.
However, revenue missed analysts' expectations, while adjusted earnings per share matched their estimates. Looking ahead, the company forecast earnings as well as revenue for the third quarter below Street estimates. Shares of the company declined more than 3 percent in the extended trades.
Michael Hilton, Nordson President and Chief Executive Officer said, "Sales, operating profit, net income and earnings per share all improved on a year-over-year basis and were in line with our guidance. The 7 percent organic sales growth outpaced levels recently reported by many industrial companies, and our operating margin was very solid at 22 percent."
Adhesive dispensing systems sales for the quarter grew 27 percent from the year-ago period to $196.38 million. Sales volume grew 30 percent from last year. The first year effect of acquisitions generated most of the increase, with organic volume improving by 1 percent.
Advanced technology systems sales rose 13 percent to $130.00 million. Organic sales volume grew by 14 percent over the prior year. Volume expanded in every geography as demand for the company's precision dispensing and fluid management solutions in mobile electronic device, medical and other niche markets remained strong.
Industrial coating systems sales rose 23 percent to $55.72 million. Sales volume increased 24 percent, inclusive of 13 percent organic growth. The organic growth included most product lines as well as geographies and continued to be driven by the investments of durable goods manufacturers.
Westlake, Ohio-based Nordson's second-quarter net income was $54.61 million or $0.84 per share, up from $52.11 million or $0.80 per share in the year-ago period.
Excluding severance and restructuring expenses of $0.04 per share in the year-ago period, adjusted earnings per share were flat with last year at $0.84. On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $0.84 per share. Analysts' estimates typically exclude special items.
Net sales for the quarter rose 21 percent to $382.10 million from $315.19 million in the prior year quarter. Analysts had a consensus revenue estimate of $382.56 million.
This increase in sales includes a 7 percent increase in organic volume and a 16 percent increase related to the first year effect of acquisitions. These were partly offset by a negative 2 percent impact related to unfavorable effects of currency translation.
Order rates for the 12-week period ending May 19, 2013, measured in constant currency, decreased by 2 percent over the same period a year ago. Backlog at the end of the second quarter was about $200 million, an increase of 3 percent compared to the end of the prior-year period.
Looking ahead to the third quarter, Nordson forecasts earnings per share in a range of $1.00 to $1.09 and sales in a range of $404 million to $419 million. Analysts expect the company to report earnings of $1.15 per share for the quarter on revenues of $428.66 million.
Hilton said, "At the midpoint of our third quarter guidance we are forecasting organic sales growth of about 2 percent, a solid level against both a period of very strong growth a year ago and a relatively low growth macroeconomic backdrop. On a sequential basis, the midpoint of our sales guidance represents growth of 8 percent, and we expect to leverage this growth to generate operating margin performance of around 24 percent in the third quarter."
NDSN closed Thursday's regular trading session at $73.14, down $0.11 or 0.15 percent on a volume of 337,893 shares. In after-hours, the stock further declined $2.64 or 3.61 percent to $70.50.
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