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 engineered components and systems stocks fared in Q1, starting with ESCO (NYSE:ESE).
Engineered components and systems companies possess technical know-how in sometimes narrow areas such as metal forming or intelligent robotics. Lately, automation and connected equipment collecting analyzable data have been trending, creating new demand. On the other hand, like the broader industrials sector, engineered components and systems 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 11 engineered components and systems stocks we track reported a slower Q1; on average, revenues were in line with analyst consensus estimates. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, but engineered components and systems stocks have shown resilience, with share prices up 5.9% on average since the previous earnings results.
ESCO (NYSE:ESE) A developer of the communication systems used in the Batmobile of “The Dark Knight,” ESCO (NYSE:ESE) is a provider of engineered components for the aerospace, defense, and utility sectors.
ESCO reported revenues of $249.1 million, up 8.7% year on year, in line with analysts' expectations. Overall, it was an ok quarter for the company with a decent beat of analysts' earnings estimates.
Bryan Sayler, Chief Executive Officer and President, commented, “Q2 was a solid quarter highlighted by both top and bottom-line growth. Revenue grew 9 percent as we continue to see favorable dynamics in our key aerospace, Navy and utility end markets. The sales performance translated to the bottom line very well as Adjusted EPS increased 24 percent compared to the prior year quarter.”
The stock is up 6.4% since reporting and currently trades at $118.58.
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Best Q1: Graham Corporation (NYSE:GHM) Founded when its founder patented a unique design for a vacuum system used in the sugar refining process, Graham (NYSE:GHM) provides vacuum and heat transfer equipment for the energy, petrochemical, refining, and chemical sectors.
Graham Corporation reported revenues of $49.07 million, up 14% year on year, outperforming analysts' expectations by 10.3%. It was an incredible quarter for the company with an impressive beat of analysts' earnings estimates.
Graham Corporation delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 14.7% since reporting. It currently trades at $29.85.
Weakest Q1: Enpro (NYSE:NPO) Holding a Guinness World Record for creating the world's largest gasket, Enpro (NYSE:NPO) designs, manufactures, and sells products used for machinery in various industries.
Enpro reported revenues of $257.5 million, down 8.9% year on year, falling short of analysts' expectations by 4.2%. It was a weak quarter for the company with a miss of analysts' earnings estimates.
Interestingly, the stock is up 5.5% since the results and currently trades at $161.99.
Applied Industrial (NYSE:AIT) Formerly called The Ohio Ball Bearing Company, Applied Industrial Technologies (NYSE:AIT) distributes industrial products–everything from power tools to industrial valves–and services to a wide variety of industries.
Applied Industrial reported revenues of $1.15 billion, up 1.3% year on year, surpassing analysts' expectations by 1.3%. Zooming out, it was an ok quarter for the company with a narrow beat of analysts' organic revenue estimates but a miss of analysts' earnings estimates.
The stock is up 11.6% since reporting and currently trades at $207.55.
RBC (TSX:RY) Bearings (NYSE:RBC) With a Guinness World Record for engineering the largest spherical plain bearing, RBC Bearings (NYSE:RBC) is a manufacturer of bearings and related components for the aerospace & defense, industrial, and transportation industries.
RBC Bearings reported revenues of $413.7 million, up 4.9% year on year, in line with analysts' expectations. Overall, it was a weaker quarter for the company with a miss of analysts' earnings estimates.
The stock is up 9.2% since reporting and currently trades at $292.21.
This content was originally published on Stock Story
