Nordson surges 6% on strong earnings and strategic portfolio realignment
Shares of Nordson Corporation (NASDAQ: NDSN) rallied sharply on Thursday after the adhesive, coatings, and precision dispensing equipment manufacturer reported quarterly results that exceeded Wall Street expectations.
The company also outlined a strategic portfolio shift aimed at strengthening its focus on differentiated technology and proprietary medical components.
Nordson shares gained 6.8% in the morning. At the time of writing, it pared some gains and was trading at $224.19, up by 4.99%.
Strong financial performance in Q3 2025
Nordson reported third-quarter revenue of $742 million, marking a 12% year-over-year increase and exceeding the midpoint of its prior guidance range.
Growth was supported by several factors, including 8% contribution from the Atrion acquisition, a favorable 2% currency impact, and 2% organic sales growth.
Analysts had expected organic revenue to remain flat, making the results particularly notable.
Earnings also outpaced expectations. Adjusted earnings per share rose to $2.73, compared with $2.41 in the same quarter last year and higher than the consensus estimate of $2.64.
EBITDA came in at $239 million, up 15% year-over-year, with an EBITDA margin of 32%.
This represented a 70 basis point improvement from the prior year, driven by increased sales volumes and improved SG&A leverage.
The company highlighted improved cash flow as another positive factor.
Free cash flow for the quarter reached $226 million, representing a conversion rate of 180% of net income. Management attributed this performance to strong operational execution and disciplined capital allocation.
Disciplined capital deployment and balance sheet strength
Nordson deployed its robust cash flow strategically across multiple priorities.
During the quarter, the company reduced net debt by $109 million, repurchased $71 million worth of shares, and returned $44 million to shareholders in dividend payments.
Additionally, it allocated $12 million toward capital investments to support growth initiatives.
The company’s balance sheet remains stable, with $148 million in cash on hand.
Nordson’s net debt leverage ratio stands at 2.2x based on trailing 12-month EBITDA, comfortably within its targeted leverage range.
This financial flexibility provides the company room to pursue growth opportunities while maintaining disciplined capital management.
Portfolio realignment to sharpen focus on proprietary technologies
In a key strategic move, Nordson announced the divestiture of select portions of its contract manufacturing product lines within the medical interventional solutions business.
The transaction, expected to close in early Q4 fiscal 2025, aligns with the company’s strategy to concentrate resources on differentiated technology and proprietary medical components.
Management emphasized that this divestiture is expected to improve the growth outlook of the company while enhancing the profitability of its Medical Fluid Solutions segment.
Specifically, the move is anticipated to be accretive to segment EBITDA margins and better position the business to capture above-market growth opportunities.
The remaining $800 million of medical and fluid solutions product lines are expected to benefit from strong customer demand, reinforcing Nordson’s long-term focus on innovation-driven markets.
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