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What's in the Offing for Nordson (NDSN) This Earnings Season?

Nordson Corporation NDSN is scheduled to release second-quarter fiscal 2024 (ended Apr 30) results on May 20, after market close.

The company has an impressive earnings surprise history, with the average beat being 5.2%. In the last reported quarter, its earnings of $2.21 per share surpassed the Zacks Consensus Estimate of $2.03 by 8.9%.

Let’s see how things have shaped up for Nordson this earnings season.

Factors to Note

The Industrial Precision Solutions segment’s results are likely to benefit from strong customer demand for the industrial coatings, polymer processing and non-wovens product lines. The Zacks Consensus Estimate for the segment’s revenues is pegged at $360 million, indicating a 7.1% jump from the year-ago reported number.

The Medical and Fluid Solutions segment is expected to have benefited from growth in the medical interventional solutions product lines. Also, investments in automation, artificial intelligence, memory and electronic product innovation are likely to have aided the segment’s performance. The consensus mark for the segment’s revenues is pegged at $171 million, suggesting a 2.4% increase from the year-ago reported figure.

The acquisition of ARAG Group and its subsidiaries, which expanded Nordson’s core capabilities in precision dispensing technology and helped it foray into the rapidly growing, precision agriculture end-market, is expected to support the company’s results.

The Zacks Consensus Estimate for the company’s second-quarter revenues is pegged at $658 million, suggesting an increase of 1.2% from the year-ago quarter’s reported figure. The consensus estimate for adjusted earnings is pinned at $2.30 per share, indicating a 1.8% increase from the year-ago quarter’s reported number.

However, Nordson is expected to put up a weak show in the upcoming earnings result due to softness across its Advanced Technology Solutions segment. The decrease in demand for electronics dispensing product lines, serving in the cyclical semiconductor end market, is expected to have hurt the segment. The Zacks Consensus Estimate for the segment’s revenues is pegged at $124 million, which is down 16.2% from the year-ago reported number.

The escalating cost of sales poses a threat to NDSN’s bottom line. High input costs are expected to have pushed up the cost of sales, which is likely to have reflected in its margins .

The company’s international presence exposes it to the risk of adverse currency fluctuations, which are likely to have hurt its performance.

Nordson Corporation Price and EPS Surprise

Nordson Corporation price-eps-surprise | Nordson Corporation Quote

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for NDSN this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as elaborated below.

Earnings ESP: NDSN has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $2.30. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: NDSN presently carries a Zacks Rank #4 (Sell).

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You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Industrial Companies

IDEX Corporation’s IEX second-quarter adjusted earnings of $1.88 per share surpassed the Zacks Consensus Estimate of $1.75. On a year-over-year basis, the bottom line decreased approximately 10.1%.

IDEX’s net sales of $800.5 million underperformed the consensus estimate of $805 million.  The top line also decreased 5.3% year over year.

A. O. Smith Corporation’s AOS second-quarter 2024 adjusted earnings of $1.00 per share surpassed the Zacks Consensus Estimate of 99 cents. The bottom line increased 6% on a year-over-year basis.

Net sales of $978.8 million missed the consensus estimate of $995 million. However, the top line inched up 1% year over year, driven by strong demand for commercial water heaters in North America.

W.W. Grainger, Inc. GWW has reported earnings per share of $9.62 in the second quarter, which beat the Zacks Consensus Estimate of $9.58. The bottom line improved 0.1% year over year.

Grainger’s quarterly revenues rose 3.5% year over year to $4.24 billion. The top line missed the consensus estimate of $4.27 billion.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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