Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Sanmina (NASDAQ:SANM) and the best and worst performers in the electrical systems industry.
Like many equipment and component manufacturers, electrical systems companies are buoyed by secular trends such as connectivity and industrial automation. More specific pockets of strong demand include Internet of Things (IoT) connectivity and the 5G telecom upgrade cycle, which can benefit companies whose cables and conduits fit those needs. But like the broader industrials sector, these companies are also at the whim of economic cycles. Interest rates, for example, can greatly impact projects that drive demand for these products.
The 12 electrical systems stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 0.6%. while next quarter's revenue guidance was below consensus. 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 electrical systems stocks have held roughly steady amidst all this, with share prices up 2.9% on average since the previous earnings results.
Sanmina (NASDAQ:SANM) Founded in 1980, Sanmina (NASDAQ:SANM) is an electronics manufacturing services company offering end-to-end solutions for various industries.
Sanmina reported revenues of $1.83 billion, down 20.9% year on year, falling short of analysts' expectations by 2.8%. Overall, it was a weak quarter for the company with a miss of analysts' earnings estimates.
"Our focused execution and operating discipline yielded financial results in line with our outlook," stated Jure Sola, Chairman and Chief Executive Officer.
Sanmina delivered the slowest revenue growth of the whole group. The stock is up 11.8% since reporting and currently trades at $71.64.
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Best Q1: Encore Wire (NASDAQ:WIRE) Started in a small warehouse in Texas in 1989, Encore Wire (NASDAQ:WIRE) manufactures a range of electrical building wire and cables.
Encore Wire reported revenues of $632.7 million, down 4.2% year on year, outperforming analysts' expectations by 7.3%. It was an impressive quarter for the company with a decent beat of analysts' earnings estimates.
Encore Wire achieved the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 2.2% since reporting. It currently trades at $289.95.
Identiv (NASDAQ:INVE) Emerging from bankruptcy and rebranding in 2013, Identiv (NASDAQCM:INVE) provides digital identity and security solutions for various industries.
Identiv reported revenues of $22.49 million, down 13.5% year on year, falling short of analysts' expectations by 2.2%. It was a weak quarter for the company with a miss of analysts' earnings estimates.
As expected, the stock is down 19% since the results and currently trades at $4.09.
Hubbell (NYSE:HUBB) A respected player in the electrical segment, Hubbell (NYSE:HUBB) manufactures electronic products for the construction, industrial, utility, and telecommunications markets.
Hubbell reported revenues of $1.40 billion, up 8.8% year on year, surpassing analysts' expectations by 1.4%. Overall, it was an ok quarter for the company with a narrow beat of analysts' earnings estimates but a miss of analysts' organic revenue estimates.
The stock is down 9.5% since reporting and currently trades at $368.78.
Verra Mobility (NASDAQ:VRRM) Managing over 165 million tolling transactions per year, Verra Mobility (NYSE: VRRM) is a leading provider of smart mobility technology that enhances safety, efficiency, and convenience on roadways.
Verra Mobility reported revenues of $209.7 million, up 9.3% year on year, surpassing analysts' expectations by 3.3%. More broadly, it was a very strong quarter for the company with a decent beat of analysts' earnings estimates.
The stock is up 23.4% since reporting and currently trades at $29.72.
This content was originally published on Stock Story
