Applied Industrial Technologies AIT reported fourth-quarter fiscal 2025 (ended June 30, 2025) earnings of $2.80 per share, which surpassed the Zacks Consensus Estimate of $2.60. The bottom line increased 5.9% year over year.Net revenues of $1.22 billion beat the consensus estimate of $1.18 billion. The top line increased 5.5% year over year. Acquisitions boosted the top line by 6.5% while foreign-currency translation had a negative impact of 0.4%. Organic sales increased 0.2% year over year. Selling days had an adverse impact of 0.8%.For fiscal 2025, AIT reported net revenues of $4.6 billion, which increased 1.9% year over year. The company’s adjusted earnings were $10.12 per share, up 3.8% year over year.

Segmental Discussion

The Service Center-Based Distribution segment’s revenues, which contributed 66% to net revenues, totaled $779.2 million. On a year-over-year basis, the segment’s revenues decreased 1.5%. Our estimate for segmental revenues was $797.3 million. Organic sales decreased 0.4%. Foreign currency translation lowered sales by 0.6% while acquisitions boosted sales by 0.3%. Selling days had an unfavorable impact of 0.8% year over year. Segmental revenues were impacted by muted end-market demand.The Engineered Solutions segment’s revenues (formerly the Fluid Power & Flow Control segment), which contributed 34% to net revenues, totaled $445.5 million. On a year-over-year basis, the segment’s revenues increased 20.7%. Our estimate for the segment’s revenues was $382.1 million.Acquisitions boosted the top line by 19.7%. Organic sales increased 1.8% driven by an increase in order rate and solid demand across key growth verticals, including technology & automation. Selling days had an adverse impact of 0.8% year over year.

Applied Industrial Technologies, Inc. Price, Consensus and EPS Surprise

Applied Industrial Technologies, Inc. price-consensus-eps-surprise-chart | Applied Industrial Technologies, Inc. Quote

AIT’s Margin Profile

In the quarter, Applied Industrial’s cost of sales was up 5.7% year over year to $850 million. Gross profit was $374.7 million, up 5.2% from the year-ago quarter. The gross margin decreased to 30.6% from 30.7% in the year-ago quarter. Selling, distribution and administrative expenses (including depreciation) increased 10.5% year over year to $239.7 million. EBITDA was $153 million, reflecting a decrease of 0.3%.

AIT’s Balance Sheet & Cash Flow

In fiscal 2025, Applied Industrial had cash and cash equivalents of $388.4 million compared with $460.6 million at the end of fiscal 2024. Long-term debt was $572.3 million, in line with the figure reported at the end of the prior fiscal year.In the fiscal year, it generated net cash of $492.4 million from operating activities, indicating an increase of 32.6% from the year-ago quarter. Capital expenditures totaled $27.2 million, up 9.3% year over year. Free cash flow increased 34.2% year over year to $465.2 million.In fiscal 2025, AIT rewarded its shareholders with dividends of $63.7 million, up 14% year over year.

Applied Industrial’s Guidance

For fiscal 2026 (ending June 2026), Applied Industrial anticipates adjusted earnings to be in the range of $10-$10.75 per share. The Zacks Consensus Estimate for adjusted earnings is pegged at $10.52 per share. The company currently anticipates sales to increase in the range of 4-7% year over year. AIT expects the EBITDA margin to be in the range of 12.2-12.5%.

AIT’s Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

Dover Corporation DOV reported earnings of $2.44 per share in second-quarter 2025, beating the Zacks Consensus Estimate of $2.39. This compares with earnings of $2.36 per share a year ago.Dover posted revenues of $2.05 billion in the quarter, surpassing the Zacks Consensus Estimate by 0.6%. This compares with year-ago revenues of $2.18 billion.Teck Resources Limited TECK came out with earnings of $0.27 per share in the second quarter of 2025, beating the Zacks Consensus Estimate of $0.2. This compares with earnings of $0.58 per share a year ago.Teck Resources posted revenues of $1.46 billion in the quarter, missing the Zacks Consensus Estimate by 8.7%. This compares with year-ago revenues of $2.83 billion. Packaging Corporation of America PKG reported earnings of $2.48 per share, beating the Zacks Consensus Estimate of $2.44. This compares with earnings of $2.2 per share a year ago.Packaging Corp. posted revenues of $2.17 billion in the quarter, surpassing the Zacks Consensus Estimate by 0.5%. This compares with year-ago revenues of $2.08 billion.

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