Image source: Nordson Corp.

What: Shares of Nordson Corporation (NASDAQ:NDSN) were up 13% as of 11:00 a.m. EDT Tuesday after the precision adhesive dispensing company announced stronger-than-expected fiscal second-quarter 2016 results.
So what: Quarterly revenue rose 9.2% year over year, to $437.6 million, as a 1% negative impact from foreign currency exchange was more than offset by 8% organic growth and a 2% contribution from the first-year effect of acquisitions. Operating margin expanded 3 percentage points, to 28%, and -- based on generally accepted accounting principles (GAAP) -- translated to 43.4% growth in net income, to $70.6 million. GAAP earnings per diluted share also climbed 53.8%, to $1.23.
For perspective, Nordson's guidance called for lower revenue growth in the range of 2% to 6%, operating margin of 19%, and GAAP earnings per share of $0.85 to $0.95. 
Nordson CEO Michael Hilton called the company's organic growth "outstanding," giving credit to "ongoing technology, application, product-tiering and segmentation initiatives and by meeting robust customer demand in consumer non-durable, electronics, and medical end markets." Meanwhile, Hilton noted healthy margins were driven by the company's "continuous improvement" margin expansion efforts, all despite persistent macroeconomic weakness that has held back growth in recent quarters.

Now what: For the current quarter, Nordson anticipates revenue growth of 1% to 5%, which equates to an approximate range of $467.4 million to $485.9 million, including organic volume in the range of a 1% decline to 3% growth, a 3% increase in revenue from acquisitions, and a 1% foreign currency headwind. That should translate to operating margin of 24% at the midpoint, with GAAP earnings per diluted share of $1.25 to $1.37.

By contrast, analysts' consensus estimates predicted third-quarter revenue of $473.8 million, or $3 million below the midpoint of guidance, and earnings of $1.23 per share.

In short, it's hard to find anything not to like about this quarter as Nordson continues to strive for margin expansion and top-line growth in excess of GDP, all in spite of the difficult business environment. When these headwinds abate, Nordson should emerge an even stronger company for it. With that in mind, and given its outperformance this quarter, it's no surprise to see investors so aggressively bidding up Nordson stock today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.