Shares of Applied Industrial Technologies (AIT) tumbled 5.46% in pre-market trading on Thursday following the release of its fiscal 2025 third-quarter results and updated guidance. Despite beating earnings estimates for the quarter, investors appeared concerned about the company's future outlook and slowing organic growth.

The industrial products distributor reported Q3 earnings per share of $2.57, surpassing the analyst consensus of $2.41. However, sales of $1.17 billion slightly missed expectations of $1.17 billion. The company's organic revenue declined by 3.1% year-over-year, indicating challenges in underlying demand.

What seems to have spooked investors most is Applied Industrial's guidance for the fourth quarter and full year. The company expects Q4 EPS between $2.52 and $2.67, below the consensus estimate of $2.76. Additionally, Applied Industrial lowered its full-year EPS guidance to a range of $9.85 to $10.00, down from its previous outlook. The reduced guidance, coupled with a projection of 0-1% sales growth for the fiscal year, suggests ongoing headwinds in the industrial sector.