3 key takeaways from Nordson Corp’s Q2 earnings report

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on May 24, 2021
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  • Nordson Corp beats Wall Street estimates in the fiscal second quarter.
  • The industrial machinery company raised its guidance for the full year.
  • Nordson Corp's shares jumped about 4% in extended trading on Monday.

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Nordson Corp. (NASDAQ: NDSN) reported its financial results for the fiscal second quarter on Monday that beat Wall Street estimates on the back of robust performance from electronics, consumer non-durable, medical, and industrial end markets. The industrial machinery company also raised its guidance for the full year on Monday.

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1. Financial performance

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Nordson said its profit in the second quarter printed at $124.1 million (£87.67 million) that translates to $2.12 per share. In the same quarter last year, its profit was capped at a lower $92.1 million, or $1.58 per share.

The Nasdaq-listed company generated $589.5 million of sales in Q2 versus the year-ago figure of $529.5 million. In comparison, experts had forecast the company to post $548.6 million of sales and $1.65 of EPS.

In separate news from the United States, Lordstown Motors slipped close to 10% in extended trading on Monday after the company slashed its production plans for 2021.

2. Sales from individual segments & CFO’s remarks

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Sales from Industrial Precision Solutions, Nordson said, climbed by 6% in the second quarter. Advanced Technology Solutions sales, on the other hand, posted a broader 18% growth in Q2. Commenting on the earnings report on Monday, CFO Joseph Kelley said:

“The strong incremental margins and record quarterly profitability reflects the execution of the NBS Next growth framework, including favourable mix improvement with the divestiture of the screws and barrels product line. The continued deployment and execution of the overall Ascend Strategy is designed to deliver sales growth with attractive incremental profit margins.”

3. Guidance for the full financial year

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According to CEO Sundaram Nagarajan, order entry trends improved in the recent quarter across most of the company’s product lines. The momentum, he added, was sustaining in Q3 to date as well.

For the full financial year, Nordson now forecasts its earnings to fall between $7.20 and $7.50. It expects sales to grow by up to 10% this year. In its earlier guidance, the Westlake-based company had forecast up to $6.70 per share of full-year earnings and up to 6% of sales growth.

Impact on the share price

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Nordson shares were reported closed to 4% up in after-hours trading on Monday. Including the price action, the stock is now exchanging hands at $209 per share versus $197 per share at the start of 2021. At the time of writing, the American multinational is valued at $11.76 billion and has a price to earnings ratio of 43.04.

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