Technology company Applied Industrial Technologies rose sharply in price last week

The technology company Applied Industrial Technologies Inc. (AIT) shares rose by more than 16% last week and were worth $113.43 at the auction on August 16. The growth driver was the second quarter’s results, which demonstrated stable demand in several areas of activity at once. Applied Industrial Technologies is a distributor and service provider in industrial technologies. Last week, the company reported the results of the fourth quarter and the entire 2022 fiscal year. 

Total quarterly sales increased by 18.5% year on year to $1.1 billion, and full-year sales increased by 17.8% year on year. Organic sales in the fourth quarter soared by almost 19% due to an increase of 21% service centers division and 14% in the hydraulic systems group. Management noted that sales accelerated in the fourth quarter, which allowed it to reach a sales record. Adjusted earnings per share were $2.02 in the fiscal fourth quarter and $6.58 for the year, an increase of 34% and 39%, respectively. 

EBITDA profit in the fourth quarter was $120 million, which is 26% more year-on-year. At the same time, Applied Industrial Technologies noted that inflation is a severe risk to the company, but so far, it is possible to increase the EBITDA margin. The management of Applied Industrial Technologies has presented a forecast for the fiscal year 2023, which assumes continued high demand and sales growth of 3-7%. Earnings are to be between $6.65 and $7.3 per share. Management also increased its long-term EBITDA margin target from 11% to 12%, noting that the EBITDA margin in the fiscal year 2023 is likely around 11%.