Applied Industrial Technologies (NYSE: AIT) reported Q3 EPS of $1.16, $0.01 better than the analyst estimate of $1.15. Revenue for the quarter came in at $885.4 million versus the consensus estimate of $891.8 million.

• Net Sales of $885.4 Million Up 7.0% YoY; Up 2.3% on an Organic Daily Basis
• EPS of $0.42; Non-GAAP Adjusted EPS of $1.16 Up 9.4% YoY
• EBITDA of $82.3 Million, 9.3% of Sales; Up 57 Bps YoY
• Results Include a $3.6 Million Non-cash LIFO Charge ($0.07 Per Share or 41 Bps)
• Mid-point of Full Year Adjusted EPS Guidance Reaffirmed, Range Tightened

Commenting on the results, Applied’s President & Chief Executive Officer Neil A. Schrimsher said, “Our performance this quarter was driven by solid growth in our core Service Center segment, gross margin execution, and ongoing SD&A cost initiatives. As discussed last quarter, softness in technology end markets and tougher comparisons are impacting reported growth in our fluid power businesses in the interim, while ongoing inflation drove a more pronounced LIFO charge. Apart from these near-term variances, we believe the industrial cycle remains firm highlighted by above normal sequential growth in our Service Center segment and encouraging order/backlog momentum exiting the quarter in our Fluid Power & Flow Control segment.”

Mr. Schrimsher added, “Reported results in the quarter were impacted by a non-cash intangible impairment charge and related restructuring costs in our Canadian upstream oil & gas operations, reflecting continued softness within Western Canada markets. We continue to take appropriate business and cost actions in Western Canada, and remain encouraged by positive momentum within our U.S. oil & gas end markets where our scaling position in key basins is contributing nicely to our multi-faceted growth.”

GUIDANCE:

Applied Industrial Technologies sees FY2019 EPS of $4.50-$4.60, versus the consensus of $4.58.

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