Nordson Announces Q4 Earnings Below Analyst Estimates
Key Metrics:
* Revenue: $615.4 million (2.8% YoY decline, 3.6% miss)
* Adjusted EPS: $2.06 (0.9% miss)
* Adjusted EBITDA: $188.1 million (3.2% miss)
* Revenue Guidance for Q1 CY2025: $670 million (2.5% below estimates)
* Adjusted EPS Guidance for Q1 CY2025: $2.40 (below estimates)
Company Overview:
Nordson (NASDAQ: NDSN) is a leading manufacturer of dispensing equipment, industrial adhesives, sealants, and coatings. Despite recent trends in automation and data analytics, the company remains subject to economic cycles that impact industrial production.
Sales Growth:
Nordson's long-term sales growth rate of 4% is below the industry average. Organic revenue has declined by 3.2% on average over the past two years, suggesting that acquisitions and foreign exchange rates have inflated headline results.
Operating Margin:
Nordson has maintained an impressive operating margin of 24.6% over the past five years, driven by a high gross margin. However, in Q4, its operating margin declined to 22.9%, indicating increased expenses.
Earnings Per Share:
EPS has grown at a CAGR of 9.9% over the past five years, supported by profitability improvements and share buybacks. In Q4, EPS reached $2.06, meeting analyst expectations. Wall Street forecasts 9.7% growth in EPS over the next 12 months.
Key Takeaways:
Nordson's Q4 results fell short of analyst estimates on revenue, EPS, and guidance. Its dependence on economic cycles remains a concern. While the company has implemented automation and data analytics strategies, its long-term sales growth outlook is modest.
Despite a weak quarter, Nordson's long-term profitability and EPS growth provide some stability. However, the stock's flat performance following the earnings announcement suggests that investors are taking a cautious approach. Further analysis is necessary to determine if this quarter presents a buying opportunity.