The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how professional tools and equipment stocks fared in Q3, starting with Fortive (NYSE:FTV).
Automation that increases efficiency and connected equipment that collects analyzable data have been trending, creating new demand. Some professional tools and equipment companies also provide software to accompany measurement or automated machinery, adding a stream of recurring revenues to their businesses. On the other hand, professional tools and equipment companies are at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies’ offerings.
The 10 professional tools and equipment stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 0.7% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Fortive (NYSE:FTV)
Taking its name from the Latin root of "strong", Fortive (NYSE:FTV) manufactures products and develops industrial software for numerous industries.Fortive reported revenues of $1.53 billion, up 2.7% year on year. This print fell short of analysts’ expectations by 1%. Overall, it was a mixed quarter for the company with an impressive beat of analysts’ adjusted operating income estimates but a miss of analysts’ organic revenue estimates.
James A. Lico, President and Chief Executive Officer, stated, “Fortive generated strong operating performance in the third quarter, with better than expected earnings and free cash flow. Our portfolio of high-quality businesses is delivering consistent and more profitable growth, evidenced by robust recurring revenue growth in Intelligent Operating Solutions and Advanced Healthcare Solutions. We are also pleased with the positive momentum in orders growth across all our segments, including double-digit orders growth in Precision Technologies in the third quarter.”
Interestingly, the stock is up 7.7% since reporting and currently trades at $80.39.
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Best Q3: ESAB (NYSE:ESAB)
Having played a significant role in the construction of the iconic Sydney Opera House, ESAB (NYSE:ESAB) manufactures and sells welding and cutting equipment for numerous industries.ESAB reported revenues of $673.3 million, down 1.1% year on year, outperforming analysts’ expectations by 3.2%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA estimates.
ESAB scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 10.1% since reporting. It currently trades at $122.71.
Weakest Q3: Hyster-Yale Materials Handling (NYSE:HY)
Playing a significant role in the development of the hydraulic lift truck, Hyster-Yale (NYSE:HY) designs, manufactures, and sells materials handling equipment to various sectors.Hyster-Yale Materials Handling reported revenues of $1.02 billion, up 1.5% year on year, falling short of analysts’ expectations by 3.8%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
As expected, the stock is down 15% since the results and currently trades at $53.25.
Kennametal (NYSE:KMT)
Involved in manufacturing hard tips of anti-tank projectiles in World War II, Kennametal (NYSE:KMT) is a provider of industrial materials and tools for various sectors.Kennametal reported revenues of $481.9 million, down 2.1% year on year. This number met analysts’ expectations. Aside from that, it was a mixed quarter as it also logged full-year EPS guidance exceeding analysts’ expectations but a significant miss of analysts’ adjusted operating income estimates.
Kennametal scored the highest full-year guidance raise among its peers. The stock is down 10.5% since reporting and currently trades at $23.78.
Snap-on (NYSE:SNA)
Founded in 1920, Snap-on (NYSE:SNA) is a global provider of tools, equipment, and diagnostics for various industries such as vehicle repair, aerospace, and the military.Snap-on reported revenues of $1.25 billion, flat year on year. This print came in 0.8% below analysts' expectations. Aside from that, it was a satisfactory quarter as it produced a solid beat of analysts’ organic revenue estimates.
The stock is up 19.1% since reporting and currently trades at $355.05.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.Want to invest in winners with rock-solid fundamentals? Check out our and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
This content was originally published on Stock Story
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