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CLEVELAND — Industrial parts distributor Applied Industrial Technologies Inc. on Tuesday reported a 50 percent drop in fiscal first-quarter profit, but the company said sales improved from the previous quarter, showing that the market may be stabilizing.
The company earned $11.2 million, or 26 cents per share, in the three months ended Sept. 30. That's compared with $22.5 million, or 52 cents per share, in the same period last year. Sales fell nearly 20 percent to $437.7 million.
The results still topped estimates of analysts polled by Thomson Reuters, who expected profit of 24 cents per share on $421.1 million in sales.
Sales rose slightly from $425.2 million in the fiscal fourth quarter, which the company said shows "stabilization in what had been a steadily declining pace." Although some of that stabilization may be due to federal stimulus spending, the company said it was optimistic "we have a found a bottom to the recession."
The company said profit margins declined slightly due to heightened price competition, but that it managed inventory well during the period.
"We expect that our sales volume will continue close to its current rate, at least through our second quarter," said Chairman and CEO David Pugh, in a statement. "Our focus will be on improving earnings with this reduced sales volume."
The company reiterated its previous fiscal-year earnings guidance of 90 cents to $1.30 per share on sales between $1.65 billion and $1.85 billion.
Analysts expect $1.13 per share on $1.72 billion in sales, on average.
Applied Industrial shares rose 21 cents to close at $20.57 on Tuesday.
