Post Earnings Coverage as Nordson Puts a Solid Beat with Earnings Per Share

LONDON, UK / ACCESSWIRE / August 26, 2016 / Active Wall St. announces its post-earnings coverage on Nordson Corporation (NASDAQ: NDSN) as the company posted its third-quarter fiscal 2016 results on August 22, 2016. Nordson reported robust results with top- and bottom-line beat. Register with us now for your free membership at: http://www.activewallst.com/register/.

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Earnings Reviewed

For the quarter ended on July 30, 2016, Nordson reported net income of $84.21 million, or $1.46 per diluted share, from the year-ago earnings of $69.39 million, or $1.14 per diluted share, topping analysts’ consensus estimate of $1.34 per share. Nordson generated net sales worth $489.9 million, up 5.9% year over year, as a less than 1% negative impact from foreign currencies was offset by both organic volume growth of 4% and a 2% contribution from acquisitions over the past year. The top-line exceeded analysts’ estimate of $481 million in revenue.

Nordson’s operating margin was 25.2% in Q3 FY16 compared to 22.2% in the corresponding year-ago period. The company’s cost of sales inched up 1.1% to $216.7 million and represented 44.2% of net revenue in the reported quarter versus 46.3% in Q3 FY 15. During Q3 FY16, selling, general, and administrative expenses came in at $149.5 million, up 2.7% on y-o-y basis.

Nordson’s CEO Michael Hilton commented of the company’s financial results:

“Nordson delivered record revenue and profitability in the third quarter as our global team continued meeting customer needs across our diverse end markets and driving efficiency throughout our operations.”

Segment Details

During Q3 FY16, Nordson’s Adhesive Dispensing Systems segment reported revenue of $220.8 million compared to revenue of $211.64 million in Q3 FY15. Organic sales volume increased 4% compared to the prior year’s third quarter, with additional volume growth of 1% related to the first year effect of the WAFO acquisition.

Revenue from the company’s Advanced Technology Systems division came in at $205.4 million in Q3 FY16, up from $184.89 million in the year ago period. The segment’s organic sales volume increased 6% compared to the prior year’s third quarter, bolstered by strong demand for automated and semi-automated dispense equipment in electronic end-markets, as well as fluid management components in medical end-markets, with additional volume growth of 5% coming from the acquisition of Liquidyn and MatriX acquisitions.

Industrial Coating Systems unit revenues were $63.7 million in the reported quarter, down from $66.19 million in Q3 FY15. The company cited the decline to challenging comparisons to the prior year, where totals segment volume was up 23%. Operating margin for the segment was 17%, or 18% excluding the impact of restructuring charges.

Order Rates and Backlog

Nordson reported that order rates for the 12-week period ending August 14, 2016, on constant currency terms, increased by 16% on y-o- y basis. The company noted that Backlog for the quarter ended July 31st, 2016 was approximately $333 million, 22% higher compared to the same period a year ago.

Financials

As of July 31, 2016, Nordson had cash and marketable securities worth $60.29 million compared to $50.327 million as of Oct 31, 2015. The company’s long-term debt was $1.03 billion as of July 31, 2016, against $1.09 billion on October 31, 2015. Capital expenditure on purchase of property, plant and equipment totaled $19.9 million compared to $12.7 million a year ago.

Outlook

For Q4 FY16, Nordson expects revenue to climb in the range of 6% to 10% on a y-o-y basis. This considers organic volume growth of 5% to 9%, and a 1% contribution from acquisitions. The company is also forecasting earnings in the range of $1.15 to $1.27 per share.

Stock Performance

At the closing bell, on Thursday, August 25, 2016, Nordson’s shares finished the day at $100.08, 0.10% higher from its previous closing price. The stock recorded a trading volume of 334,877 shares, which was higher than its 3 months average volume of 286.920 shares. The stock has been performing well as it advanced 12.95% in the last month, 13.90% in the past three months, and 40.19% in the previous six months. Additionally, the company’s share price has gained 57.49% from the start of the year. Shares of Nordson, which engineers, manufactures, and markets products and systems to dispense, apply, and control adhesives, coatings, polymers, sealants, biomaterials, and other fluids, are trading at a PE ratio of 25..49.

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