Raising Estimates Slightly; 1Q18 Beats
- 1Q18 (Sept) EPS of 86 cents (vs 70 cents a year earlier) was up 23% YoY and 6 cents above our forecast (10 cents over consensus) due to sales $18 million (or 3%) more than what we modeled on 9% organic growth;
- Carrying through the 1Q outperformance, partially offset by higher costs expected in the second half of the year, for FY18 our EPS estimate is now $3.18 (from $3.15 previously and the record $2.84 in FY17), up 12% from our FY17 projection;
- For FY19, our EPS estimate is now $3.55 (from $3.53), up 12% from our FY18 estimate.
Applied Industrial Technologies is a distributor of bearings, power transmission products, fluid power components and systems, specialty flow control solutions, and other industrial supplies, operating in North America, Australia, New Zealand, and Singapore. In addition, the company provides engineering, design, and systems integration for industrial, fluid power, and flow control applications, as well as customized mechanical, fabricated rubber, fluid power, and flow control shop services. The company has two reportable segments: service center based distribution; and fluid power and flow control.
Great Lakes Review is located in Cleveland, Ohio, was founded in 1981 and became a division of Wellington Shields & Co. LLC in 2011. Great Lakes Review is a research boutique focused on the fundamentally-oriented investor seeking companies that dominate their respective specialty niche regardless of industry. The objective is to make money for the long-term by gradually accumulating a diversified portfolio from a universe of no more than 30 companies. Although short-term-oriented accounts will be alerted to trading opportunities, aggressive sell recommendations are triggered only by a deterioration in long-term fundamentals, not by short-term blips or investor fancy. Coverage of those names that lose their earnings momentum or earnings predictability may be dropped and replaced with more vital candidates.
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