Earnings Roundup: NOW, ODP, Owens & Minor and More

Major distributors and manufacturers continue to raise their full-year outlook after better-than-expected 2Q results and persistent demand.

We’re in the midst of the latest quarterly earnings reporting period for publicly-traded companies for the April-June period. For most companies, that was their fiscal second quarter. Below, find the key sales and profit figures for top distributors and manufacturers in the markets MDM typically covers:

NOW Inc.

Houston-based oil & gas products distributor NOW Inc. reported its 2Q 2022 results on Aug. 4, showing a notable acceleration in both year-over-year revenue and gross margin.

The company, which does business via its DistributionNOW brand, posted total 2Q sales of $539 million, up 34.8% year-over-year and up 14.0% from 1Q. 

NOW’s 2Q gross margin of 23.7% outpaced the 21.3% of a year earlier and 22.6% in 1Q, Operating profit was $29 million, compared to break-even a year earlier and $23 million in 1Q, while 2Q operating margin was 5.4%.

By geography, U.S. revenue of $408 million increased 38% and operating margin was 7.8%; Canada revenue of $72 million increased 41% and operating margin increased 8.3%; and International revenue of $59 million increased 11% and operating margin was -15.3%.

“I am proud of our record EBITDA as a percentage of revenues, reaching 8.7 percent this quarter,” said David Cherechinsky, NOW president and CEO. “These results reflect the transformative two-year journey the entire organization has made, laying the groundwork for making this incredible turnaround indelible.”

In its 2Q report, NOW also shared that it had closed on a “margin-accretive U.S. Process Solutions acquisition” that fortifies the company’s pump strategy.

Looking ahead, NOW raised its full-year 2022 guidance, now expecting total revenue to be up as much as 30% from 20201, compared to the 20% increase issued at the end of 1Q. The company expects 3Q revenues to increase in the mid-single digit percentage range, with gross margins reverting to its first-half average.

ODP Corp.

ODP Corp., the holding company of Office Depot, reported its 2Q results on Aug. 3. 

The Boca Raton, Florida-based office products retailer and distributor’s financials were led by sales of $2.034 billion that dipped 1.7% year-over-year, while operating profit of $28 million likewise trailed the $30 million of a year earlier. ODP’s 2Q net profit of $20 million was identical to a year earlier.

ODP’s Business Solutions Division (BSD) had sales of $1.2 billion, up approximately 6% year-over-year, partly attributed to more business customers continuing to return to the workplace. ODP said that increase was partially offset by lower sales through the company’s eCommerce channel related to lower sales of pandemic-related products. BSD operating profit of $45 million jumped 45%, or 100 basis points, year-over-year.

ODP’s Retail Division sales of $811 million were down approximately 11% year-over-year. Which the company partly attributed to having 71 fewer retail locations than a year earlier as a result of planned store closures. The company closed 12 retail stores in 2Q and had 1,020 stores at the end of June. Operating profit of $46 million was up 5% year-over-year.

On June 21, ODP reaffirmed its stance on delaying a previously announced plan to spit the company into separate B2B and B2C entities following a review of proposals to purchase the company’s consumer-centered operations. In its 2Q report, ODP said the company continues to transform its operations under its holding company structure into its B2C business and three distinct B2B businesses and digital segments: Office Depot, ODP Business Solutions, Veyer, and Varis.

ODP is expecting 2022 full year sales of between $8.45 billion and $8.6 billion.

Global Industrial

Ecommerce-based industrial distributor Global Industrial Company reported its 2Q financial results on Aug. 2, which showed considerable year-over-year gains in revenue and profit.

The Port Washington, New York-based company posted 2Q total sales of $319 million — a company quarterly record — which was up 16.8% year-over-year. Average daily sales increased 16.9%.

Global Industrial’s 2Q gross margin of 35.5% slid from the 36% of a year earlier, while operating profit of $31 million and margin of 9.6% grew from the $25 million and 9.1% of a year earlier.

The company’s 2Q net profit of $23 million ticked up from the $22 million of a year earlier.

“Gross margin remains healthy, but pulled back from the record performance in the first quarter of the year, reflecting the impact of freight fuel surcharges, select promotional activities, as well as the flow through of some higher cost inventor,” commented Barry Litwin, Global Industrial CEO.

Owens & Minor

Global healthcare products distributor Owens & Minor reported its 2Q results on Aug. 3. The Richmond, Virginia-based company’s figures were led by total revenues of $2.5 billion that were essentially flat year-over-year, increasing 0.4%, while operating profit of $75 million trailed the $97 million of a year earlier.

Owens & Minor’s 2Q net profit of $29 million likewise was less than half of the $66 million of a year earlier.

The company is forecasting 2022 full year revenue to be in the range of $9.8 billion to $10.1 billion.

Kennametal

Tooling supplier Kennametal reported its 2022 fourth-quarter and full-year financial results on Aug. 1, which showed a modest increase in 4Q sales that were a deceleration from the first half of the year.

The Pittsburgh, Pennsylvania-based company posted 4Q sales of $530 million, up 2.7% year-over-year, with organic sales up approximately 7%. The company said currency had a 4% headwind impact. Kennametal’s 4Q operating profit was $63 million on 11.8% margin, compared with $61 million and identical margin a year earlier; 4Q net profit of $43 million topped 2021’s $35 million.

By business segment in 4Q:

  • Metal Cutting sales of $316 million increased 1.3% year-over-year, with organic sales up approximately 7%, largely offset by a 6% currency exchange headwind. Operating profit of $34 million and margin of 10.8% increased from $33 million and 10.6% margin a year earlier.
  • Infrastructure sales of $214 million increased 4.9% year-over-year, with organic sales up approximately 7%, partially offset by a 2% currency exchange headwind. Operating profit of $29 million and margin of 13.7% improved from $28 million and 13.5% a year earlier.

For the full year, Kennametal had total fiscal 2022 sales of $2.01 billion, up 9.3% from 2021. Organic sales increased approximately 11%, partially offset by a 2% currency exchange headwind. Operating profit of $218 million on margin of 10.8% both more than doubled the $102 million and 5.5% margin of a year earlier.

Full yet net profit of $145 million dwarfed 2021’s $54 million.

Caterpillar

Heavy equipment maker Caterpillar reported its 2Q 2022 financial results on Aug. 2. The figures were led by an 11% year-over-year sales increase to $14.2 billion, while operating margin of 13.6% slid 0.3 percentage points. CAT said the increase was due to price realization and higher sales volume, partially offset by unfavorable currency impacts related to the euro, Australian dollar and Japanese yen.

North American 2Q sales of $6.77 billion increased 18% year-over-year.

CAT’s total 2Q net profit of $1.67 billion increased 18.4% year-over-year.

Ametek

Berwyn, Pennsylvania-based electronic instruments and electromechanical devices manufacturer AMETEK reported that 2Q 2022 earnings were up 9% over last year to a record $1.51 billion.

In 2Q 2022, operating income increased 15% to a record $364.8 million, and operating margins were 24.1%, up 130 basis points from second quarter 2021 margins, AMETEK said.

“AMETEK delivered excellent results in the second quarter with record sales, operating income and adjusted earnings per share,” said David A. Zapico, AMETEK chairman and CEO. “Our results were ahead of expectations driven by strong organic sales growth and continued impressive operating performance. Additionally, end demand remains strong and broad-based with excellent organic orders growth in the quarter. Given this performance, we are raising our earnings guidance for the full year.”

The company’s Electronic Instruments Group sales in 2Q were $1.03 billion, up 10% from the second quarter of 2021. Electromechanical Group sales were a record $486.3 million, up 7% from the same period a year ago.

Schneider Electric

Schneider Electric reported its second-quarter and first-half 2022 earnings, including a 10% year-over-year revenue increase for 2Q.

The company reported quarterly revenues of $8.64 billion (USD) in 2Q “despite lockdowns in China and impact from Russia,” Schneider said.

Revenue in 2Q for its Energy Management segment rose 12%, while revenue for Industrial Automation was up 6%. For the first six months of 2022, the company reported adjusted net income of $1.83 billion (USD).

“In the first six months of 2022 we faced a very disturbed environment: the war in Ukraine entailing sanctions on Russia, the resurgence of COVID-19, particularly in China in the second quarter, tensions on supply chain as a collateral of a continued strong demand, and inflation on costs,” said Jean-Pascal Tricoire, chairman and CEO.

Related Posts

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access