Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Nordson (NASDAQ:NDSN) and its peers.
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 beat analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was 3% below.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Nordson (NASDAQ:NDSN)
Founded in 1954, Nordson Corporation (NASDAQ:NDSN) manufactures dispensing equipment and industrial adhesives, sealants and coatings.Nordson reported revenues of $744.5 million, up 3.5% year on year. This print exceeded analysts’ expectations by 1%. Despite the top-line beat, it was still a slower quarter for the company with revenue guidance for next quarter missing analysts’ expectations.
Commenting on the Company’s fiscal 2024 fourth quarter results, Nordson President and Chief Executive Officer Sundaram Nagarajan said, “I appreciate our team’s focus and commitment to our customers, which delivered results above our fourth quarter guidance expectations. Our Advanced Technology Solutions segment delivered year-over-year fourth quarter sales growth, as electronics demand continued to steadily improve at fiscal year-end. During the down electronics cycle, our ATS team holistically implemented the NBS Next (LON:NXT) growth framework, making them responsive to the needs of our customers while also delivering a strong incremental operating performance. Our industrial product lines performed well against record comparisons from prior year. I’m also pleased with the early integration of our Atrion Medical (TASE:PMCN) acquisition, which contributed positively to the quarter.”
Nordson achieved the fastest revenue growth but had the weakest full-year guidance update of the whole group. Still, the market seems discontent with the results. The stock is down 12.5% since reporting and currently trades at $220.99.
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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 8.9%. 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 12.5% since reporting. It currently trades at $125.34.
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 14.8% since the results and currently trades at $53.43.
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 number topped analysts’ expectations by 7.8%. It was a very strong quarter as it also put up a solid beat of analysts’ organic revenue estimates and a decent beat of analysts’ EPS estimates.
The stock is up 19.8% since reporting and currently trades at $356.99.
Stanley Black & Decker (NYSE:SWK)
With an iconic “STANLEY” logo which has remained virtually unchanged for over a century, Stanley Black & Decker (NYSE:SWK) is a manufacturer primarily catering to the tool and outdoor equipment industry.Stanley Black & Decker reported revenues of $3.75 billion, down 5.1% year on year. This print missed analysts’ expectations by 1.4%. Overall, it was a slower quarter as it also produced full-year EPS guidance missing analysts’ expectations and a slight miss of analysts’ organic revenue estimates.
Stanley Black & Decker had the slowest revenue growth among its peers. The stock is down 15.6% since reporting and currently trades at $86.85.
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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