Applied Industrial Technologies

Applied Industrial Technologies reported fiscal fourth-quarter organic sales growth of 9.7%, its fastest pace in more than three years, and raised its five-year sales target to $7 billion from $5.5 billion. Twenty of the company's top 30 end markets posted positive year-over-year sales growth, up from 17 last quarter, with automation sales jumping more than 20% year-over-year. EBITDA margin expanded more than 60 basis points to above 13%, EBITDA grew 16%, and the company generated $461 million in free cash flow for the year. However, fiscal 2027 guidance calls for sales growth of just 4% to 6.5%, citing tougher comparisons and limited visibility into trade policy, while gross margin slipped 20 basis points as LIFO expense more than doubled to $6.4 million.

Applied Industrial Technologies reported record fourth-quarter sales and earnings that exceeded expectations, with organic sales growth of 10%—the strongest in more than three years. The company expanded EBITDA margins by more than 60 basis points to over 13%, grew EBITDA by 16%, and increased EPS by 13% compared to the prior year. Applied also raised its intermediate financial targets, increasing its sales objective to $7 billion from $5.5 billion and its EBITDA margin objective to 14% from 13%. For fiscal 2027, the company issued EPS guidance of $11.65 to $12.15 based on sales growth of 4% to 6.5% and EBITDA margins of 12.5% to 12.8%.

S&P Global declared a third-quarter 2026 cash dividend of $0.97 per share, payable September 10 to shareholders of record August 26, with an annualized rate of $3.88. Applied Industrial Technologies declared a quarterly cash dividend of $0.51 per share, payable August 31 to shareholders of record August 14. Korn Ferry declared a cash dividend of $0.55 per share, payable July 31 to shareholders of record July 6, and noted it repurchased 1.2 million shares during the quarter, bringing fiscal 2026 buybacks to 1.8 million shares. Rithm Capital declared a second-quarter 2026 common stock dividend of $0.25 per share, payable July 31 to shareholders of record July 2. Reaves Utility Income Fund announced a 5% increase in its annual distribution to $2.52, paid monthly at $0.21 per share, representing an annualized distribution rate of 6.12% based on a market price of $41.18 and net asset value of $41.86 as of June 17.

Engineered components and systems stocks reported a strong first quarter, with the 13 companies tracked by StockStory beating revenue consensus estimates by 4.4% on average and issuing next-quarter revenue guidance 3.7% above expectations. Applied Industrial posted revenues of $1.25 billion, up 7.3% year-on-year and 2.2% above analyst forecasts, though it delivered the weakest guidance update among its peers. Arrow Electronics was the standout performer, with revenues surging 39% to $9.47 billion, exceeding estimates by 12.9% and providing the highest guidance raise. ESCO reported revenues of $309.3 million, up 33.5% but missing estimates by 3.4%, making it the weakest performer against analyst expectations. Share prices across the group have risen an average of 16.7% since the latest earnings results.

Applied Industrial Technologies continues to benefit from strong demand for technical MRO services and recent acquisitions, though rising expenses and supply-chain constraints remain concerns. In the fiscal third quarter ended March 31, 2026, organic sales in the Service Center Based Distribution segment rose 4.2% year over year, while the Engineered Solutions segment saw a 9.3% organic sales increase. The company announced the bolt-on acquisition of Thompson Industrial Supply in January 2026, expected to generate approximately $20 million of annual sales in its first year, and acquired IRIS Factory Automation in May 2025 to boost automation offerings. Capital deployment included $53.7 million in dividends paid during the first nine months of fiscal 2026, up 15.2% year over year, and a quarterly dividend increase of 11% to 51 cents per share in January 2026, along with $236.4 million in share repurchases and a new buyback program authorized in April 2026 for up to 3 million shares. However, cost of sales rose 8.1% and SG&A expenses increased 9.4% in the first nine months, while LIFO expense jumped to $15.1 million from $4.8 million a year earlier, with further increases expected in the fiscal fourth quarter.