Why Nordson Corporation Stock Just Slumped 9%

Markets Motley Fool

What happened

Continue Reading Below

Shares of adhesives- and coatings-dispensing equipment maker Nordson Corporation (NASDAQ: NDSN) are down 9% as of 10:45 a.m. EDT, following the company's announcement Monday evening of yet another earnings beat.

So what

Nordson reported 19% growth in per-share earnings to $1.74 for fiscal Q3 2017, on sales growth of 20%, to $589.4 million. CEO Michael Hilton noted that this was Nordson's "strongest quarter in its history."

Analysts had only expected Nordson to report profits of $1.66 per share, and sales of $575.6 million. So once again (and for at least the fourth straight time) Nordson "beat" earnings on Monday.

And yet, Nordson undercut this good news by issuing new guidance for its current fiscal fourth quarter, which appeared to fall short of Wall Street's mark.

Continue Reading Below

Now what

At last report, Wall Street analysts were predicting that Nordson would earn $1.49 per share on $567.3 million in revenue in its fourth-quarter 2017, growing its profits 7% in comparison to Q4 2016, and its sales 11%. This would bring the company to $5.40 per share in profit, and $2.05 billion in sales, for the year.

Instead, Nordson told investors to expect sales growth of somewhere between 4% and 8% in Q4 -- about half the growth that Wall Street was expecting, at the midpoint of guidance. Profits for the quarter, said Nordson, will range between $1.18 and $1.32 -- so only $1.25 at the midpoint, or 16% below estimates.

Even if Nordson exceeds the midpoint and hits the top of its guidance in Q4, the company will still probably earn only $5.03 per share this year, which is far short of what Wall Street had been expecting. After such a strong year to date, this comes as a big disappointment to investors.

No wonder they're selling in droves.

10 stocks we like better than Nordson
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Nordson wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of August 1, 2017

David Gardner has no position in any of the stocks mentioned. Rich Smith has no position in any of the stocks mentioned. Tom Gardner owns shares of Nordson. The Motley Fool owns shares of Nordson. The Motley Fool has a disclosure policy.