Applied Industrial Technologies began its new fiscal year with higher sales and profit, helped by strong demand in its service operations and recent acquisitions.
The Cleveland-based distributor said revenue for the quarter ending Sept. 30 rose 9% from a year earlier to $1.2 billion. Growth was driven by solid results in its service center business, which supplies maintenance and repair products, while sales in its Engineered Solutions division were slightly lower.
Earnings climbed to about $101 million, up from $92 million a year earlier. CEO Neil Schrimsher said the quarter reflected firm demand in the company’s core markets and continued progress on internal sales and efficiency efforts. He said the service center business benefited from customer activity in shorter-cycle maintenance projects, while the engineered solutions segment showed signs of improvement in incoming orders.
Applied also reported stronger profitability as it kept expenses in check and improved operations across its distribution channels. Schrimsher said the company is seeing gradual improvement in customer confidence but noted that demand remains mixed due to economic and trade policy uncertainty. He said Applied is “constructive” about its position as industrial activity slowly picks up across North America.
For the full year, Applied expects continued moderate growth and maintained its earlier sales outlook. The company raised its profit forecast slightly, reflecting the solid first-quarter results and recent share repurchases.
The company distributes industrial motion, fluid power, flow control, and automation equipment to manufacturers and maintenance customers across North America.
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