Applied Industrial Technologies reported second-quarter adjusted earnings per share of $1.79, surpassing the consensus estimate of $1.68 by 6.5%. Net income rose 12% year-over-year to $101.2 million, driven by improved operating leverage and disciplined cost management. Gross margin expanded by 110 basis points to 32.4%, reflecting higher pricing realization and mix benefits in the company’s fluid power and bearings segments.

Total sales for the quarter reached $1.155 billion, missing the consensus forecast of $1.17 billion by 1.3%. Organic revenue growth was a modest 2.5%, held back by softness in customer end-markets such as heavy industrial maintenance. Revenues from recent acquisitions contributed an additional 3.8% lift, offsetting flat demand in legacy distribution channels. Industrial product sales increased 4.1%, while service revenues remained flat sequentially.

During the quarter, Applied completed two bolt-on acquisitions totaling $85 million in purchase price, expected to add $0.10 to full-year EPS. The company now anticipates full-year adjusted EPS of $6.55 to $6.65, up from prior guidance of $6.50 to $6.60. Management highlighted a healthy cash conversion cycle of 34 days and ended the period with $280 million of available liquidity, positioning the company to pursue further strategic tuck-ins in complementary industrial niches.