What's in Store for Applied Industrial (AIT) in Q4 Earnings?

Core Insights - Applied Industrial Technologies, Inc. (AIT) is set to release its fourth-quarter fiscal 2024 results on August 15, with earnings estimates remaining unchanged over the past 60 days, and a history of beating consensus estimates with an average surprise of 8.2% [1] - The consensus estimate for revenues is $1.19 billion, reflecting a 2.5% increase year-over-year, while adjusted earnings are expected to be $2.52 per share, indicating a 7.2% increase from the previous year [1] Group 1: Revenue and Earnings Expectations - The Service Center Based Distribution segment is anticipated to generate revenues of $812.4 million, a 3.9% increase from the previous year, supported by strong market position and growth in technical MRO support demand [2] - Total revenues for AIT are expected to reach $1.2 billion, a 2.9% increase year-over-year, with adjusted earnings projected at $2.54 per share, reflecting a 7.9% increase from the prior year [3] Group 2: Challenges and Costs - The Engineered Solutions segment is expected to perform weakly due to decreased demand in the OEM channel, linked to reduced shipments of off-highway mobile and fluid power components [3] - Rising selling, distribution, and administrative expenses, along with increased costs of sales due to higher raw material and labor costs, are likely to negatively impact AIT's bottom line [4] Group 3: Earnings Prediction Model - The current earnings prediction model indicates that AIT does not conclusively predict an earnings beat, with an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are at $2.52 [5] - AIT holds a Zacks Rank of 2 (Buy), which typically increases the odds of an earnings beat, but the current situation does not support this [5]