Applied Industrial Down to Strong Sell - Analyst Blog

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Zacks Investment Research downgraded Applied Industrial Technologies, Inc. ( AIT ) to a Zacks Rank #5 (Strong Sell) on Nov 19, 2013.

Why the Downgrade?

Applied Industrial Technologies reported a disappointing result for the fiscal first quarter 2014 (ended Sep 30, 2013) on Oct 30. Shares of the company since the earnings release have fallen 4.1%. A brief of the quarter's result is provided below:

Earnings per share came in at 63 cents, down 10% from the year-ago earnings of 70 cents. As compared with the Zacks Consensus Estimate of 71 cents, earnings fell short by 11.3%. Revenue in the quarter decreased 0.9% year over year due primarily to weak industrial demand. Volume was weak in the quarter.  

Cost of sales was down 2.3% while operating expenses increased by 8.4%. Operating margin weakened to 6.5% versus 7.3% in the year-ago quarter.

For fiscal 2014, management of Applied Industrial Technologies has revised down its revenue and earnings guidance. Sales are now anticipated to be within a $2.43-$2.49 billion range versus the $2.56-$2.61 billion range expected earlier, while earnings per share are expected to be within a $2.65-$2.95 range, versus $2.90-$3.15 expected earlier.

Weak results and guidance for the year have led to a downward revision in earnings estimates for Applied Industrial Technologies. In the last 30 days, the Zacks Consensus Estimate has gone down by 8.9% to $2.76 for fiscal 2014 and has declined 7.5% to $3.21 for fiscal 2015.

We also have an Earnings ESP of -1.67% for the fiscal second quarter of 2014 and -0.62% for fiscal year 2015.

Other Stocks to Consider

Applied Industrial is a $2.0 billion company, operating in the industrial equipment wholesale industry. Howver, stocks to watch out for in the industry are Xylem Inc. ( XYL ) with Zacks Rank #1 (Strong Buy). Of two others, Middleby Corp. ( MIDD ) and Graham Corp. ( GHM ), each come with a Zacks Rank #2 (Buy).



APPLD INDL TECH (AIT): Free Stock Analysis Report

GRAHAM CORP (GHM): Free Stock Analysis Report

MIDDLEBY CORP (MIDD): Free Stock Analysis Report

XYLEM INC (XYL): Free Stock Analysis Report

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Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: AIT , GHM , MIDD , XYL

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