Looking back on internet of things stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Emerson Electric (NYSE:EMR) and its peers.
Industrial Internet of Things (IoT) companies are buoyed by the secular trend of a more connected world. They often specialize in nascent areas such as hardware and services for factory automation, fleet tracking, or smart home technologies. Those who play their cards right can generate recurring subscription revenues by providing cloud-based software services, boosting their margins. On the other hand, if the technologies these companies have invested in don’t pan out, they may have to make costly pivots.
The 7 internet of things stocks we track reported a softer Q2. As a group, revenues missed analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was 3.4% below.
Inflation progressed towards the Fed’s 2% goal at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation, and while some internet of things stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.7% since the latest earnings results.
Emerson Electric (NYSE:EMR) Founded in 1890, Emerson Electric (NYSE:EMR) is a multinational technology and engineering company providing solutions in the industrial, commercial, and residential markets.
Emerson Electric reported revenues of $4.38 billion, up 11% year on year. This print fell short of analysts’ expectations by 1.3%. Overall, it was a disappointing quarter for the company with a miss of analysts’ earnings estimates.
"Emerson delivered another strong quarter, with solid underlying orders growth and with profitability and cash flow both exceeding expectations," said Emerson President and Chief Executive Officer Lal Karsanbhai.
Emerson Electric achieved the fastest revenue growth of the whole group. Even though it had a great quarter relative to its peers, the market seems discontent with the results. The stock is down 4.5% since reporting and currently trades at $261.99.
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Best Q2: Rockwell Automation (NYSE:NYSE:ROK) One of the first companies to address industrial automation, Rockwell Automation (NYSE:ROK) sells products that help customers extract more efficiency from their machinery.
Rockwell Automation reported revenues of $2.05 billion, down 8.4% year on year, in line with analysts’ expectations. The business had a very strong quarter with an impressive beat of analysts’ earnings estimates.
The market seems content with the results as the stock is up 4.5% since reporting. It currently trades at $261.99.
Weakest Q2: Vontier (NYSE:VNT) A spin-off of a spin-off, Vontier (NYSE:VNT) provides electronic products and systems to the transportation, automotive, and manufacturing sectors.
Vontier reported revenues of $696.4 million, down 8.9% year on year, falling short of analysts’ expectations by 6.7%. It was a disappointing quarter as it posted revenue guidance for next quarter missing analysts’ expectations.
Vontier delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 17.8% since the results and currently trades at $32.26.
SmartRent (NYSE:SMRT) Founded by an employee at a real estate rental company, SmartRent (NYSE:SMRT) provides smart home devices and software for multifamily residential properties, single-family rental homes, and student housing communities.
SmartRent reported revenues of $48.52 million, down 9.1% year on year. This print came in 6% below analysts' expectations. Overall, it was a disappointing quarter as it also produced a miss of analysts’ earnings estimates.
The stock is flat since reporting and currently trades at $1.66.
Arlo (NYSE:ARLO) With its name deriving from the Old English word meaning “to see,” Arlo (NYSE:ARLO) provides home security products and other accessories to protect homes and businesses.
Arlo reported revenues of $127.4 million, up 10.8% year on year. This print beat analysts’ expectations by 1.9%. Zooming out, it was a disappointing quarter as it logged full-year revenue guidance missing analysts’ expectations.
Arlo delivered the biggest analyst estimates beat but had the weakest full-year guidance update among its peers. The stock is down 17.1% since reporting and currently trades at $11.20.
This content was originally published on Stock Story
