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Applied acquires former motion target in socal; posts 2Q results. AIT added a like distributor with about $20 million in annual revenue, while encouraging financials led to raising the lower end of the company's guidance. Fluid power, power transmission and automation products distributor Applied Industrial Technologies reported its 2026 fiscal second quarter financial results on Jan. 27 for the three months ended Dec. 31, alongside an acquisition in Southern California. On the latter front, AIT said it has acquired Thompson Industrial Supply - a like distributor of industrial bearings, power transmission, hydraulics, pneumatics, linear motion and lightweight belting products and related service solutions, based in Los Angeles. Thompson operates with a team of more than 40 employees between two locations and serves customers across a range of core verticals including food & beverage, consumer products, pharmaceutical, life sciences and others. Thompson will be integrated into Applied's U.S. Service Center operations and AIT expects it to generate annual sales of about $20 million in its first year of ownership. "We welcome Thompson to Applied as we continue to bolster our local service center position and provide our customers with leading aftermarket support of motion control solutions," AIT President and CEO Neil Schrimsher said in a news release. "Thompson is a nice bolt-on acquisition that will enhance our footprint in an important industrial market. They bring strong technical knowledge and aligned supplier relationships, as well as in-house belting and fabrication capabilities that will strengthen our value-added services and competitive position in the region. We look forward to seeing their capabilities support our collective efforts and value proposition moving forward." Applied's 2Q results. Cleveland-based AIT posted total 2Q sales of $1.163 billion that increased 8.4% year-over-year, powered by a 600-basis-point impact from acquisitions and 20 points from foreign currency. Excluding those factors, organic sales increased 2.2%, reflecting a 2.9% gain in the company's Service Center segment and a 0.5% uptick in Engineered Solutions. Applied said price contributed a nearly 250 bps impact to organic sales growth. The 2Q organic gain was a deceleration from 3.0% in 1Q, but a second straight quarter of low single-digit organic growth after seven straight quarters of between +0.7% to -3.4%. AIT's 2Q gross margin of 30.4% was down 20 bps year-over-year, and up 30 bps from 1Q. EBITDA of $140 million topped the $135 million of a year earlier, and net profit of $95 million improved from $93 million. Applied said that 15 of its top 13 industry verticals grew year-over-year in 2Q26, down one from 1Q. Strongest growth was in metals, aggregates, mining, utilities & energy, machinery, transportation and construction, offset by declines primarily in lumber & wood, chemicals, oil & gas, rubber & plastics and refining. Looking ahead, Applied raised the lower end of its previous guidance, now calling for 5.5%-7.0% annual sales growth in 2026, with 2.5%-4.0% organic growth. That's up from 4-7%/1-4% issued in AIT's 1Q report. Meanwhile, EBITDA margin guidance narrowed to 12.2%-12.4% from 12.2%-12.5%. On MDM's 2025 Top Distributors Lists, Applied ranked No. 7 for Industrial Supplies, No. 11 for MRO, No. 2 for Power Transmission/Bearings, No. 7 for Industrial PVF, No. 1 for Fluid Power and No. 10 for Fasteners.

Applied Industrial shares fell 7.8% after the company reported fourth-quarter results showing signs of slowing growth. The industrial products distributor posted revenue of $1.16 billion, up 8.4% year-over-year but missing Wall Street's $1.17 billion estimate. Whilst GAAP earnings per share of $2.51 narrowly beat expectations by $0.02, organic revenue grew just 2.2%, missing estimates and signalling weaker underlying demand. Adjusted EBITDA of $140.4 million also fell short of consensus forecasts. Despite full-year profit guidance aligning with analyst projections, investors focused on the revenue miss and sluggish organic growth. Applied Industrial's shares typically have low volatility, with only six moves exceeding 5% over the past year, suggesting markets view this news as particularly significant.

Applied Industrial Technologies reported fiscal second-quarter earnings of $95.3 million, or $2.51 per share, surpassing Wall Street expectations of $2.48 per share. However, the Cleveland-based industrial products company's revenue of $1.16 billion fell short of analyst forecasts of $1.17 billion. The company has issued full-year earnings guidance ranging from $10.45 to $10.75 per share. Applied Industrial Technologies' shares have risen almost 10% since the beginning of the year and increased 8% over the past 12 months.