Looking back on vehicle parts distributors stocks' Q2 earnings, we examine this quarter's best and worst performers, including GATX (NYSE:GATX) and its peers.
Supply chain and inventory management are themes that grew in focus after COVID wreaked havoc on the global movement of raw materials and components. Transportation parts distributors that boast reliable selection in sometimes specialized areas combined and quickly deliver products to customers can benefit from this theme. Additionally, distributors who earn meaningful revenue streams from aftermarket products can enjoy more steady top-line trends and higher margins. But like the broader industrials sector, transportation parts distributors are also at the whim of economic cycles that impact capital spending, transportation volumes, and demand for discretionary parts and components.
The 4 vehicle parts distributors stocks we track reported a slower Q2; on average, revenues beat analyst consensus estimates by 7.1%. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and vehicle parts distributors stocks have had a rough stretch, with share prices down 5% on average since the previous earnings results.
GATX (NYSE:GATX) Originally founded to ship beer, GATX (NYSE:GATX) provides leasing and management services for railcars and other transportation assets globally.
GATX reported revenues of $386.7 million, up 12.7% year on year, in line with analysts' expectations. Overall, it was a weak quarter for the company with a miss of analysts' earnings estimates and underwhelming earnings guidance for the full year.
The stock is down 6.4% since reporting and currently trades at $136.22.
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Best Q2: Rush Enterprises (NASDAQ:RUSHA) Headquartered in Texas, Rush Enterprises (NASDAQ:RUSH.A) provides truck-related services and solutions, including sales, leasing, parts, and maintenance for commercial vehicles.
Rush Enterprises reported revenues of $2.03 billion, up 1.2% year on year, outperforming analysts' expectations by 8.8%. It was a very strong quarter for the company with an impressive beat of analysts' earnings estimates.
The market seems content with the results as the stock is up 1.8% since reporting. It currently trades at $51.92.
Weakest Q2: Air Lease (NYSE:AL) Established by a founder of Century City in Los Angeles, Air Lease Corporation (NYSE:AL) provides aircraft leasing and financing solutions to airlines worldwide.
Air Lease reported revenues of $667.3 million, flat year on year, falling short of analysts' expectations by 2.6%. It was a weak quarter for the company with a miss of analysts' earnings estimates.
Air Lease posted the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 11.4% since the results and currently trades at $42.28.
FTAI Aviation (NASDAQ:FTAI) With a focus on the CFM56 engine that powers Boeing (NYSE:BA) and Airbus’s aircrafts, FTAI Aviation (NASDAQ:FTAI) provides aircraft and engine leasing as well as the maintenance and repair of these products.
FTAI Aviation reported revenues of $443.6 million, up 61.7% year on year, surpassing analysts' expectations by 22%. Zooming out, it was a strong quarter for the company: FTAI Aviation blew past analysts' revenue and adjusted EBITDA expectations. This was driven by the Aerospace Products segment, which manufactures aftermarket components for engines and aircraft that is used in maintenance and repairs. The company also stated that it inducted 20 V2500 engines year to date and expects to induct an additional 30 by year end, showing that it is diversifying away from the core CFM56 engine that drives most of its business.
FTAI Aviation pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is down 4.1% since reporting and currently trades at $103.42.
This content was originally published on Stock Story
