Applied Industrial Technologies Q2 Earnings Call Highlights

1 week ago 9

MarketBeat

Tue, January 27, 2026 astatine 11:40 AM CST 7 min read

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Applied reported Q2 results astir successful enactment with guidance arsenic consolidated income roseate 8.4% (2.2% organic) and EPS was $2.51, and it raised full‑year guidance to EPS $10.45–$10.75 with integrated income present expected to summation 2.5%–4%.
Higher-than-expected LIFO expense
Management highlighted accelerating bid momentum successful Engineered Solutions (orders >10% organically; Automation +20%, fluid powerfulness ~13%, travel power ~8%) and beardown superior allocation with $99.7M operating currency flow, an 11% dividend increase, ~$90M of Q2 buybacks, and the acquisition of Thompson Industrial Supply (adds ~$20M successful yearly sales).
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Applied Industrial Technologies (NYSE:AIT) reported fiscal 2026 second-quarter results that absorption said were successful enactment with guidance contempt a higher-than-expected LIFO disbursal and softer-than-normal income enactment successful December. Executives pointed to improving bid trends, expanding backlogs and income funnels, and aboriginal third-quarter momentum arsenic factors supporting a stronger income trajectory into calendar 2026.

Consolidated income roseate 8.4% twelvemonth implicit twelvemonth successful the quarter, including a 6-point payment from acquisitions and a 20-basis-point tailwind from overseas currency translation. On an integrated basis, income accrued 2.2%.

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CEO Neil Schrimsher said integrated maturation was modestly beneath the anterior quarter’s 3% and described monthly trends arsenic “choppy.” November integrated income were up by a astir mid-single-digit percent twelvemonth implicit twelvemonth aft a debased single-digit summation successful October, but maturation moderated successful December, erstwhile mean regular income rates were “notably beneath mean seasonal patterns.” Management attributed portion of the December variability to seasonal factors and the midweek timing of the holidays, and said it did not presumption the December weakness arsenic indicative of underlying demand.

In aboriginal fiscal 3rd quarter, the institution said integrated income month-to-date successful January were trending up by a mid-single-digit percent twelvemonth implicit year, with continued affirmative booking momentum successful some segments.

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Gross borderline was 30.4%, down 19 ground points from 30.6% successful the prior-year quarter. CFO Dave Wells said LIFO disbursal totaled $6.9 million, supra the company’s expectations and up from $0.7 cardinal a twelvemonth earlier, creating a 54-basis-point year-over-year resistance connected gross margin. Wells said the LIFO summation reflected broader merchandise ostentation and supplier terms increases, arsenic good arsenic the company’s determination to summation inventory concern based connected its outlook and “firming demand” processing crossed the business.