Why Applied Industrial Technologies Jumped as Much as 14% in Morning Trading

What happened

Shares of Applied Industrial Technologies (NYSE: AIT), a distributor and service provider of industrial motion and control technologies, rose as much as 14% in morning trading today. As of roughly 1:30 p.m. ET, the stock was up about 13%. The big move followed the company's fiscal fourth-quarter 2022 earnings update, which was released before the market opened.

So what

Sales climbed 18.5% year over year to $1.1 billion in the fiscal fourth quarter and rose 17.8% for the full year. Q4 organic sales jumped 18.7%, driven by a 21% increase in the company's service center division and a 14% increase in the fluid power and flow control group. Management noted that sales accelerated during the fourth quarter, allowing it to achieve a company record.

Adjusted earnings per share came in at $2.02 in the fiscal fourth quarter and were $6.58 for the year, up 34.4% and 38.8%, respectively. Q4 earnings before interest, taxes, depreciation, and amortization (EBITDA) of $120 million was higher by 26.5%. Like the sales figure, quarterly earnings and EBITDA were both at record levels. Although the industrial company noted the current inflationary headwinds, it was still able to expand EBITDA margins in the quarter. That's a positive sign for the future.

Now what

In addition to reporting its latest results, Applied Industrial Technologies also provided guidance for fiscal 2023. Noting continued strong demand, the company expects sales to grow between 3% and 7%, with earnings of $6.65 to $7.30 per share. Management also increased its long-term goal of 11% EBITDA margins to 12%, noting that EBITDA margins in fiscal 2023 are likely to be around 11%. Given the solid backdrop here, it is hardly surprising that investors were pleased with the quarterly results today.

10 stocks we like better than Applied Industrial Technologies
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Applied Industrial Technologies wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of July 27, 2022

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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


More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.