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Nordson Misses Q4 Earnings & Revenues; Projects Weak Q1

Nordson CorporationNDSN reported lower-than-expected results for fourth-quarter fiscal 2015 (ended Oct 31, 2015). The company's adjusted earnings came in at 95 cents per share, below the Zacks Consensus Estimate of $1.08. Also, the bottom line declined 17.4% from the year-ago tally of $1.15 per share.

Including severance & restructuring costs and other one-time adjustments, the company's Generally Accepted Accounting Principles ("GAAP") earnings were 84 cents per share, down from $1.13 reported a year ago.

For fiscal 2015, Nordson Corporation's adjusted earnings were $3.57 per share, down from $3.88 per share in fiscal 2014.

Nordson Corporation - Earnings Surprise | FindTheBest

Revenues

Nordson Corporation generated revenues of $446.2 million in fourth-quarter 2015, decreasing 4.8% year over year. Top-line decline includes flat organic volume sales and 2% contribution from acquisitions, offset by a 7% negative impact from currency translation.

Also, the top line lagged the Zacks Consensus Estimate of $450 million.

Backlog was $229 million, up 8% year over year. Orders for the 12-week period ended Dec 6, 2015 fell 5% year over year.

Nordson Corporation reports its top-line results under three segments, namely, Adhesive dispensing systems, Advanced technology systems and Industrial coating systems. A brief discussion on the segmental performance is provided below:

Revenues from the Adhesive dispensing systems segment decreased 2% year over year to $226.9 million, representing 50.9% of total revenue. Advanced technology systems' revenues declined 9.1% year over year to $147.3 million, accounting for 33% of total revenue. Revenues generated from the Industrial coating systems segment decreased 4.1% to $72 million. It represented 16.1% of total revenue.

On a regional basis, revenues sourced from the U.S. decreased 3.6% year over year. Businesses in Japan, Asia Pacific and Europe also weakened; recording revenue decline of 16.6%, 10.8% and 0.8%, respectively. However, top-line performance in the Americas was encouraging, with revenues increasing 12.2% year over year.

For fiscal 2015, Nordson Corporation generated revenues of $1,688.7 million, down 0.9% year over year.

Margins

Nordson Corporation's cost of sales was roughly flat year over year, while representing 47.4% of total revenue versus 45.1% in the year-ago quarter. Selling and administrative expenses, as a percentage of total revenue, was 35.7% as against 32.3% in the year-ago quarter. Operating profits declined 28.6% year over year, while the margin came in at 17%.

Balance Sheet & Cash Flow

Exiting fourth-quarter fiscal 2015, Nordson Corporation's cash and marketable securities declined 17.6% to $50.3 million from $61 million in the preceding quarter. The company's long-term debt was $1,092.6 million, up from $922.7 million recorded at third-quarter end.

In the reported quarter, Nordson Corporation generated cash of $93.1 million from its operating activities, down from $105.2 million in the year-ago quarter. Capital spent on addition of property, plant and equipment decreased 15.7% year over year to $13.2 million.

During the quarter, Nordson returned approximately $210 million to its shareholders through share buyback and dividend payments.

Outlook

For first-quarter fiscal 2016, Nordson Corporation anticipates sales to decline in a range of 1−5%. Organic volume is predicted to decline 3% to increase 1%, while acquisition gains are expected to be roughly 3%. These will, however, be partially offset by a 5% negative impact from adverse foreign currency movements.

GAAP earnings are expected in a range of 47−57 cents per share. The bottom-line prediction includes 8 cents per share of negative impact from currency movements.

With a market capitalization of nearly $4.1 billion, Nordson Corporation carries a Zacks Rank #4 (Sell).

Better-ranked stocks in the sector include Encore Wire Corp. WIRE , CUI Global, Inc. CUI and John Bean Technologies Corporation JBT . While Encore Wire sports a Zacks Rank #1 (Strong Buy), both CUI Global and John Bean Technologies carry a Zacks Rank #2 (Buy).

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NORDSON CORP (NDSN): Free Stock Analysis Report

ENCORE WIRE CP (WIRE): Free Stock Analysis Report

CUI GLOBAL INC (CUI): Free Stock Analysis Report

JOHN BEAN TECH (JBT): Free Stock Analysis Report

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


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

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