Bearish stock to watch: Nordson Corporation (NASDAQ: NDSN)

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Nordson Corporation (NASDAQ: NDSN) stock lost over 1.8% in the pre-market session on December 12th, 2019 (as of 5:15 pm GMT-5; Source: Google finance) after the fourth quarter of FY 19 results. The company’s backlog for the quarter at the end of October 2019 was approximately $385 million, which is a decline of 1 percent compared to the same period a year ago. The impact from the fiscal 2019 acquisition of Optical Control GmbH was not significant. In the fourth quarter of fiscal year 2019, the company has reported operating profit of $140 million and net income of $103 million, compared operating profit and net income of $117 million and $87 million respectively in the corresponding quarter of prior year.

NDSN in the fourth quarter of FY 19 has reported the adjusted earnings per share of $1.79, beating the analysts’ estimates for the adjusted earnings per share of $1.77, according to Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 3 percent to $585.45 million in the fourth quarter of FY 19, beating the analysts’ estimates for revenue by 3.12%. The revenue growth includes the increase of abour 4 percent organic volume, growth related to the first year effect of acquisitions of less than 1 percent, and a decrease related to the unfavorable effect of currency translation as compared to the prior year’s fourth quarter of approximately 1 percent.

Additionally, NDSN has declared a first quarter 2020 cash dividend of $0.38 per common share, which will be paid on January 7, 2020 to shareholders of record as of the close of business on December 20, 2019.

For the full fiscal year 2020, the organic sales volume is projected to increase in the range of 1 to 3 percent compared to fiscal year 2019, with growth from the first year effect of acquisitions will add 20 basis points. The company expects to post the operating margin and EBITDA margin equal to fiscal 2019 results. For the fiscal year 2020, the company projects interest expense to be approximately $36 million and maintenance capital expenditures to be approximately $50 million. The company’s estimated effective tax rate for fiscal year 2020 is approximately 22 percent. NDSN expects the GAAP diluted earnings per share growth is forecasted to be in the range of 2 to 6 percent as compared to fiscal year 2019 GAAP diluted earnings per share.

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