Applied Industrial Tech Q4 Sales, FY17 Outlook Disappoint

Applied Industrial Technologies AIT released its fourth quarter earnings, which was in line with the Street estimates. However, sales and outlook fell shy of the expectations sending the stock down in the pre-market trading. The company reported net income of $26.1 million, or $0.66 a share, in the fourth quarter, down from $28.0 million, or $0.70 a share, in the year-ago period. Street expected a similar EPS of $0.66. However, Applied Industrial Technologies reported a 6.4 percent fall in total sales from $677.5 million to $634.0 million, which fell short of the analysts' predictions of $642.28 million. Revenue reflected 2.4 percent growth from acquisition-related volume, which was more than offset by a 7.6 percent drop in underlying operations apart from 1.2 percent unfavorable currency impact. Applied's President & Chief Executive Officer, Neil Schrimsher, commented, "Our fourth quarter and full-year results reflect an economic environment that continues to be challenging. Sequentially, fourth quarter demand was generally flat compared to the third quarter, including reduced demand in oil and gas, mining and other industrial end markets." Going forward, the company expects EPS between $2.40 and $2.60 for the fiscal year 2017 whereas the Street is looking for an EPS of $2.66. Following this, the stock traded down by $0.10, or 0.21 percent, to $48.09 in the pre-market trading on Friday.