Financial Performance - Net sales for Q3 2025 were $1.2 billion, an increase of 1.8% year-over-year, with a 6.6% contribution from acquisitions[4] - Net income reached $99.8 million, or $2.57 per share, reflecting a 3.7% increase compared to the previous year[6] - EBITDA for the quarter was $144.9 million, up 6.8% year-over-year, with EBITDA margins expanding due to effective cost management[6] - The company reported a 3.1% organic sales decline, with expectations of continued end-market weakness in the near term[5] - Net income for the nine months ended March 31, 2025, was $285,152,000, compared to $282,271,000 for the same period in 2024, reflecting a slight increase[24] - EBITDA for the nine months ended March 31, 2025, was $409,031,000, compared to $399,865,000 for the same period in 2024, showing a growth of approximately 2.8%[27] - The company reported a diluted adjusted net income per share of $7.10 for the nine months ended March 31, 2024, compared to $7.18 for the same period in 2023[26] Cash Flow and Dividends - Operating cash flow was $122.5 million, and free cash flow increased by 50% year-over-year to $114.9 million[6] - Net cash provided by operating activities increased to $345,337,000 for the nine months ended March 31, 2025, from $252,159,000 in 2024, representing a growth of approximately 37%[24] - Free cash flow for the nine months ended March 31, 2025, was $327,042,000, up from $234,805,000 in 2024, indicating an increase of about 39%[28] - The company paid dividends totaling $46,159,000 in the nine months ended March 31, 2025, compared to $41,524,000 in 2024, marking an increase of approximately 11%[24] - A quarterly cash dividend of $0.46 per common share was declared, payable on May 30, 2025[11] Acquisitions and Capital Expenditures - The company announced the acquisition of IRIS Factory Automation, expected to close soon, enhancing its automation platform[8] - The company incurred $273,312,000 in cash outflows for the acquisition of businesses during the nine months ended March 31, 2025, significantly higher than $21,440,000 in 2024[24] - Capital expenditures for the nine months ended March 31, 2025, were $18,295,000, compared to $17,354,000 in 2024, reflecting a slight increase[24] Guidance and Market Conditions - The company updated its fiscal 2025 guidance, projecting EPS of $9.85 to $10.00, down from the previous range of $9.65 to $10.05[7] - The total assets increased to $3.12 billion as of March 31, 2025, compared to $2.95 billion a year earlier[22] - The tax rate for adjusted net income was 21.8% for the nine months ended March 31, 2024[26] - The effect of exchange rate changes resulted in a cash decrease of $5,361,000 during the nine months ended March 31, 2025[24] Share Repurchase - A new share repurchase authorization was announced for up to 1.5 million shares, replacing the prior plan[10]

Core Insights - Applied Industrial Technologies (AIT) reported quarterly earnings of $2.57 per share, exceeding the Zacks Consensus Estimate of $2.40 per share, and showing an increase from $2.48 per share a year ago, resulting in an earnings surprise of 7.08% [1] - The company achieved revenues of $1.17 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.51%, and up from $1.15 billion year-over-year [2] - The stock has gained approximately 1.6% since the beginning of the year, contrasting with the S&P 500's decline of 5.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.74, with expected revenues of $1.21 billion, and for the current fiscal year, the EPS estimate is $9.89 on revenues of $4.55 billion [7] - The estimate revisions trend for Applied Industrial Technologies is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Manufacturing - General Industrial industry, to which Applied Industrial Technologies belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Financial Performance - Sales increased by 1.8% year-over-year, reaching $1.167 billion in Q3 2025 compared to $1.146 billion in Q3 2024 [9, 10] - EBITDA increased by 6.8% year-over-year, from $135.7 million in Q3 2024 to $144.9 million in Q3 2025 [10, 11] - Earnings per share (EPS) increased by 3.7% year-over-year, from $2.48 in Q3 2024 to $2.57 in Q3 2025 [9, 10] - Gross margin increased by 95 basis points year-over-year, reaching 30.5% in Q3 2025 compared to 29.5% in the prior year [11, 25] - Operating cash flow was $122.5 million, and free cash flow was $114.9 million, up 50% year-over-year [11, 32] Segment Performance - Service Center Distribution segment sales decreased by 3.5% year-over-year in Q3 2025 [17] - Engineered Solutions segment sales increased by 13.5% year-over-year in Q3 2025 [24] - Hydradyne Acquisition contributed nearly $59 million in sales and nearly $6 million in EBITDA during F3Q25 [15] Sales Trend - Organic daily sales decreased by 3.1% year-over-year [10, 13] - Average daily sales organic sequential increase of +2% in F3Q25 was ~200 bps below normal seasonal patterns [13] Guidance and Outlook - Fiscal year 2025 sales are projected to increase by 0% to 1% year-over-year [40] - Fiscal year 2025 EBITDA margin is expected to be between 12.3% and 12.4% [40] - The company anticipates over $400 million of free cash flow in fiscal year 2025 [15]

Core Viewpoint - Wall Street analysts anticipate a quarterly earnings per share (EPS) of $2.40 for Applied Industrial Technologies (AIT), reflecting a year-over-year decline of 3.2%, while revenues are projected to be $1.16 billion, an increase of 1.3% from the previous year [1] Group 1: Earnings and Revenue Estimates - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analysts' projections [1] - Analysts expect 'Net Sales- Engineered Solutions' to reach $394.23 million, representing a year-over-year increase of 10.4% [4] - The estimate for 'Net Sales- Service Center Based Distribution' is projected at $766.60 million, indicating a decline of 2.9% from the prior-year quarter [4] Group 2: Operating Income Projections - The consensus for 'Operating income- Engineered Solutions' is estimated at $55.08 million, up from $49.51 million reported in the same quarter last year [5] - Analysts project 'Operating income- Service Center Based Distribution' to be $99.49 million, slightly down from $100.47 million reported in the same quarter of the previous year [5] Group 3: Stock Performance - Over the past month, AIT shares have increased by 5.8%, contrasting with a decline of 0.8% in the Zacks S&P 500 composite [6] - AIT holds a Zacks Rank of 3 (Hold), suggesting that its performance is expected to align with the overall market in the near future [6]

Group 1 - The stock of Applied Industrial Technologies, Inc. (AIT) is experiencing significant attention due to high implied volatility in the options market, particularly the May 16, 2025 $175 Call option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a substantial price change or an upcoming event that could trigger a rally or sell-off [2] - Currently, Applied Industrial Technologies holds a Zacks Rank 2 (Buy) in the Manufacturing - General Industrial industry, which is in the bottom 45% of the Zacks Industry Rank [3] Group 2 - Over the past 60 days, no analysts have increased their earnings estimates for the current quarter, while one analyst has revised the estimate downward, resulting in a decrease of the Zacks Consensus Estimate from $2.42 to $2.40 per share [3] - The high implied volatility may indicate a developing trade opportunity, as options traders often seek to sell premium on options with high implied volatility, hoping the underlying stock does not move as much as expected at expiration [4]

Industry Overview - The Zacks Manufacturing – General Industrial industry includes companies producing a variety of industrial equipment, such as power transmission products, bearings, and fluid power components, serving sectors like mining, oil and gas, and agriculture [3] - The industry is currently facing challenges due to a slowdown in new orders, supply-chain issues, and a shortage of skilled labor in the U.S. [1][4] Current Trends - Manufacturing activities expanded for the second consecutive month in February, with the Manufacturing PMI at 50.3%, although this is a decline from January's 50.9% [4] - The New Orders Index fell to 48.6%, indicating contraction as customers remain cautious amid market volatility and tariff-related risks [4] - Rising input costs and supply-chain disruptions are negatively impacting profitability, with the Supplier Deliveries Index showing slower deliveries for three consecutive months [5] Company Performance - Companies like Dover Corporation, RBC Bearings, Applied Industrial Technologies, and DNOW Inc. are focusing on cost-control measures and product development to remain competitive [2] - RBC Bearings reported a 15.5% year-over-year revenue increase in its Aerospace & Defense segment, with a robust backlog of $896.5 million [17] - DNOW has seen a 10.3% increase in earnings estimates to 86 cents per share for 2025, benefiting from steady demand in energy markets [22] - Dover's earnings estimates have increased by 1.3% to $9.46 per share for 2025, with positive booking growth across segments [25] - Applied Industrial Technologies anticipates a 1-3% year-over-year sales growth for fiscal 2025, with earnings estimates rising to $9.90 per share [30] Market Performance - The Zacks Manufacturing – General Industrial industry has declined by 6.7% over the past year, underperforming the broader sector's decline of 7.6%, while the S&P 500 index grew by 9.3% [9] - The industry's current forward 12-month Price-to-Earnings (P/E) ratio is 20.31X, slightly below the S&P 500's 20.92X and above the sector's 18.17X [12]

Core Viewpoint - Applied Industrial Technologies, Inc. (AIT) is experiencing growth driven by its Engineered Solutions segment and strategic acquisitions, alongside shareholder-friendly initiatives that enhance value [1][4]. Group 1: Company Overview - Applied Industrial is a distributor of value-added industrial products, including engineered fluid power components, bearings, and power transmission products, primarily serving OEMs and maintenance customers in regions like Australia, North America, Singapore, and New Zealand [2]. - The company's stock has increased by 26% over the past year, significantly outperforming the industry, which saw a decline of 0.1% [2]. Group 2: Growth Drivers - AIT is well-positioned for growth due to strong performance in key markets such as chemicals, food and beverage, pulp and paper, and technology, with particular demand in the semiconductor sector and technology-related fluid power markets [5]. - Favorable order trends in automation and technology verticals are further supporting revenue growth in the Engineered Solutions segment [5]. Group 3: Expansion Initiatives - AIT has enhanced its product portfolio through strategic acquisitions, including Hydradyne in January 2025, which strengthens its fluid power offerings and expands its presence in the Southeast U.S. [6]. - The acquisition of Grupo Kopar in May 2024 extended AIT's automation platform into Mexico, while the acquisitions of Bearing Distributors and Cangro in September 2023 bolstered its strategic growth in the U.S. Southeast and upper Northeast regions [6]. - The buyout of Advanced Motion Systems Inc. in April 2023 further expanded AIT's footprint in the upper Northeast and strengthened supplier relationships [6]. Group 4: Shareholder Returns - AIT is committed to increasing shareholder value through dividends and share repurchases, having paid out $28.4 million in dividends in the first half of fiscal 2025, a 4.4% increase year-over-year [7]. - The company raised its quarterly dividend rate by 24% in January 2025 and has a share buyback program authorized for up to 1.5 million shares, with 974,624 shares remaining to be repurchased as of December 31, 2024 [7].

Core Viewpoint - The stock of Applied Industrial Technologies (AIT) has recently experienced a bearish trend, losing 5% over the past week, but the formation of a hammer chart pattern suggests a potential trend reversal as buying interest may be increasing [1][2]. Technical Analysis - A hammer chart pattern indicates a potential bottom in a downtrend, characterized by a small candle body and a long lower wick, suggesting that selling pressure may be exhausting [3][4]. - The occurrence of a hammer pattern at the bottom of a downtrend signals that bears might be losing control, indicating a possible trend reversal [4]. Fundamental Analysis - There has been a positive trend in earnings estimate revisions for AIT, with a 0.3% increase in the consensus EPS estimate for the current year over the last 30 days, indicating that analysts expect better earnings than previously predicted [6][7]. - AIT holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market, suggesting strong fundamental prospects for a turnaround [8].

Group 1 - Zacks Premium offers various tools to help investors make informed decisions, including daily updates on Zacks Rank and Industry Rank, Equity Research reports, and Premium stock screens [1][2] - The Zacks Style Scores are designed to complement the Zacks Rank, rating stocks based on value, growth, and momentum methodologies, helping investors identify stocks likely to outperform the market in the next 30 days [2][3] Group 2 - Stocks are rated with an alphabetic system from A to F based on their value, growth, and momentum qualities, with A being the highest score indicating a better chance of outperforming [3] - The Value Score identifies attractive and discounted stocks using various financial ratios, while the Growth Score focuses on a company's financial strength and future outlook [3][4] - The Momentum Score helps investors capitalize on price trends, while the VGM Score combines all three styles to highlight stocks with the best overall potential [5][6] Group 3 - The Zacks Rank is a proprietary model that uses earnings estimate revisions to simplify portfolio building, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [7][8] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B to maximize potential success [9][10] Group 4 - Applied Industrial Technologies (AIT) is a distributor of industrial products, primarily serving OEM and MRO customers in regions including Australia, North America, Singapore, and New Zealand [11] - AIT holds a Zacks Rank of 2 (Buy) and has a VGM Score of B, with a Growth Style Score of B indicating a forecasted year-over-year earnings growth of 1.2% for the current fiscal year [12] - The Zacks Consensus Estimate for AIT's earnings has increased by $0.11 to $9.87 per share, with an average earnings surprise of 5.3%, making it a strong candidate for growth investors [12][13]

Core Insights - The article highlights the top 5 stocks that US Congress members are investing in for 2025, providing insights into their investment strategies and market confidence [1][3]. Group 1: Top Stocks - Applied Industrial Technologies Inc. (NASDAQ: AIT) is a significant holding for Senator Markwayne Mullin, with over $1.6 million in trades disclosed in January. AIT shares increased by 8.98% in January and 43% over the past year, despite a slight 0.4% year-over-year decline in Q2 2025 sales. Net income rose by 6.7% to $93.3 million, with long-term returns up 288% over five years [5]. - Goldman Sachs (NYSE: GS) has seen a 17% increase since Representative Josh Gottheimer's purchase on December 30, 2024. In Q4 2024, Goldman reported $13.87 billion in revenue and $4.11 billion in net earnings, benefiting from strong performance in asset management and advisory services [6]. - Tempus AI Inc. (NASDAQ: TEM) experienced a 132.11% surge in share price following Representative Nancy Pelosi's purchase of 50 call options. The stock is up 27% year-to-date, driven by the launch of its AI-powered health concierge app [7]. - Credo Technology Group (NASDAQ: CRDO) saw its shares rise nearly 60% in the past year, supported by a 22% year-over-year revenue increase and an 18% rise in net income in Q4 2024, reflecting strong demand for cloud and AI-driven networking [9]. - Palo Alto Networks (NASDAQ: PANW) has attracted significant congressional investment, with purchases totaling at least $1.6 million. In Q2 2025, the company reported a 14% year-over-year revenue increase to $2.3 billion, with annual recurring revenue growing by 37% to $4.8 billion [10][11].