Shares of Nordson Corporation ( NDSN ) touched a new 52-week high of $82.24 during its trading session on May 23. The new 52-week high improved upon the last one of $77.41 hit on May 14.
Nordson closed the session on May 23 at $81.86, reflecting a solid year-to-date return of 13.1%. The trading volume for the session was 0.82 million. Positive revisions in earnings estimates for fiscal 2014 as well as an expected 13.0% earnings growth rate for the next five years indicate further upward potential for this machinery company.
Nordson reported an impressive result for fiscal second-quarter 2014 (ended Apr 30, 2014). Adjusted earnings came in at 97 cents per share, up 15.5% year over year and also surpassed the Zacks Consensus Estimate of 90 cents by 7.8%.
Revenues generated rose 9.3% to $417.5 million driven by organic volume growth of 4.0%, acquisitions contribution of 5.0% and 1.0% gain from currency translation. Backlog was $247.0 million, up 25% from the year-ago quarter, while orders for the 12-week period ended May 18, 2014 increased 9% year over year, on a constant currency basis. Operating profits grew 12.9% year over year, while operating margin gained 70 basis points (bps) and stood at 22.2%.
For fiscal third-quarter 2014, Nordson anticipates total revenues to grow in the 9−13% range; comprising 3−7% organic revenues growth, 5% contribution from acquisitions and 1% gain from foreign currency translation. Operating margin is expected to be roughly 24%. Non-adjusted earnings are expected to lie in the range of $1.06−$1.16 per share.
Stellar quarter-performance and a robust outlook have made us optimistic about Nordson's performance in the coming quarters. The company has an Earnings ESP of +1.80% for fiscal third-quarter 2014, +2.45% for fiscal 2014 and +2.38% for fiscal 2015.
Estimate Revisions Show Potency
Over the last seven days, the Zacks Consensus Estimate for Nordson has inched up 0.5% to $3.68 for fiscal 2014 and by 0.7% to $4.21 for fiscal 2015. The Zacks Consensus Estimate depicts year-over-year growth rate of 8.9% for fiscal 2014 and 14.3% for fiscal 2015.
Nordson Corporation has a market capitalization of $5.2 billion and carries a Zacks Rank #2 (Buy). Some better-ranked stocks in the industry include Gorman-Rupp Co. ( GRC ), Illinois Tool Works Inc. ( ITW ) and Blount International Inc. ( BLT ). While Gorman-Rupp sports a Zacks Rank #1 (Strong Buy), both Illinois Tool Works and Blount International have a Zacks Rank #2.
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