Nordson Shares Slump On Weak Full-year Guidance

On Thursday, Nordson (NASDAQ:NDSN ) Corporation, a manufacturer of industrial equipment, saw its shares fall by 8.5%. This drop came as a reaction to the company's full-year guidance, which was perceived as weak by analysts. Despite delivering solid results, the company provided a conservative outlook for Fiscal Year 2025, citing a lower backlog and cautious customer spending.

The company enters FY25 with a reduced backlog of $580 million compared to $800 million at the start of the year, indicating a book-to-bill ratio of approximately 0.9x in the fourth quarter. Analysts from Jefferies maintained a 'hold' rating, highlighting the weaker guidance for FY25. KeyBanc Capital Markets, echoing a 'sector weight' rating, expressed disappointment in the initial FY25 outlook due to significant declines in the backlog. However, DA Davidson maintains a 'buy' rating, noting that sales and adjusted operating profit were ahead of expectations.

Nordson's forecast for FY25 includes an adjusted EPS range of $9.70 to $10.50, falling below the Bloomberg Consensus estimate of $10.39. For the first quarter of FY25, the company anticipates sales between $615 million and $655 million, compared to an estimate of $678.8 million, and an adjusted EPS of $1.95 to $2.15.

The fourth quarter results revealed an adjusted EPS of $2.78 with sales increasing by 3.5% year-over-year to $744.5 million, surpassing the estimate of $736.2 million. While industrial precision solutions sales saw a decrease of 3.3% year-over-year, advanced technology solutions sales grew by 4.7%. Total (EPA:TTEF ) operating profit declined by 3.3% year-over-year.

Reflecting on the performance, Nordson's CEO commented on the conservative stance for entering FY25 due to the evolving global macro-environment and the expected seasonal slowdown in the first quarter. Despite the cautious outlook, the CEO remains confident in the long-term growth drivers and highlighted the successful integration of Atrion Medical (TASE:PMCN ), which contributed positively to the quarter. Nordson's diversified portfolio and leadership in niche markets are expected to deliver balanced results despite the challenging macro environment. The company continues to work towards its Ascend strategy goals of achieving $3 billion in annual sales and greater than 30% EBITDA margins by 2025.

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Source: Investing.com