Nordson's Q1 Earnings: A Mixed Bag, But Backlog Growth Offers Hope

Nordson Corporation (NDSN) reported its fiscal first quarter 2025 earnings on February 19, 2025, providing a mixed picture of performance. While sales and earnings fell short of expectations, the company's backlog growth of 15% during the quarter offers a glimmer of hope for a potential recovery in demand.



Sales for the quarter were $615 million, a decrease of 2.8% year-over-year, driven by an organic sales decrease of 9% and unfavorable currency translation of 2%. Earnings per diluted share were $1.65, while adjusted earnings per diluted share were $2.06, a 7% decrease from the prior year adjusted earnings per diluted share of $2.21. EBITDA in the first quarter was $188 million, or 31% of sales, a decrease of 4% compared to prior year EBITDA of $197 million, also at 31% of sales.

Segment-wise, the Industrial Precision Solutions segment saw sales decrease by 11% due to weaker systems demand in polymer processing and industrial coatings product lines. The Medical and Fluid Solutions segment experienced a 21% increase in sales, primarily driven by acquisitions, but also saw an 11% organic decline due to medical customer destocking. The Advanced Technology Solutions segment reported an 11% decrease in sales, driven by lower organic sales and unfavorable currency translation, but maintained a flat operating profit due to strategic cost reduction actions and manufacturing footprint optimization.

Despite the mixed performance, Nordson's backlog growth of 15% during the quarter signals a potential recovery in demand. This growth in backlog suggests that customers are placing more orders, indicating an increase in demand for Nordson's products and services. The key end markets driving this improvement can be inferred from the segment performance, with the medical, industrial, and advanced technology end markets likely to contribute to Nordson's recovery.

Nordson's President and Chief Executive Officer Sundaram Nagarajan commented on the company's fiscal 2025 first quarter results, stating, "We experienced weakness across multiple end markets as we exited calendar year 2024, resulting in sales performance at the low end of our guidance range for our first fiscal quarter. However, we were encouraged to see broad order entry acceleration during the quarter, and backlog grew by approximately $85 million. Despite weaker sales, our teams performed well operationally and delivered earnings in line with our guidance mid-point. Overall, I am pleased with this solid execution in the face of dynamic market conditions, and we are positioned for growth as end market demand improves."

For the second quarter of fiscal 2025, Nordson expects sales to be in the range of $650 to $690 million, with adjusted earnings forecasted to be in the range of $2.30 to $2.50 per diluted share. As the medical, industrial, and advanced technology end markets continue to recover, Nordson is well-positioned to benefit from increased demand for its products and services.

In conclusion, Nordson's fiscal first quarter 2025 earnings report presented a mixed picture of performance, with sales and earnings falling short of expectations. However, the company's backlog growth of 15% during the quarter offers a glimmer of hope for a potential recovery in demand. As the medical, industrial, and advanced technology end markets continue to recover, Nordson is well-positioned to benefit from increased demand for its products and services.