As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at construction machinery stocks, starting with Terex (NYSE:TEX).
Automation that increases efficiencies and connected equipment that collects analyzable data have been trending, creating new sales opportunities for construction machinery companies. On the other hand, construction machinery companies are at the whim of economic cycles. Interest rates, for example, can greatly impact the commercial and residential construction that drives demand for these companies’ offerings.
The 4 construction machinery stocks we track reported a slower Q2. As a group, revenues missed analysts’ consensus estimates by 1.3%.
The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
While some construction machinery stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2% since the latest earnings results.
Terex (NYSE:TEX)
With humble beginnings as a dump truck company, Terex (NYSE:TEX) today manufactures lifting and material handling equipment designed to move and hoist heavy goods and materials.Terex reported revenues of $1.38 billion, down 1.5% year on year. This print fell short of analysts’ expectations by 3.2%. Overall, it was a mixed quarter for the company with a decent beat of analysts’ organic revenue estimates but full-year revenue guidance missing analysts’ expectations.
"The Terex team continues to perform at a high level and demonstrated strong execution in the second quarter," said Simon Meester, Terex President and Chief Executive Officer.
Terex scored the highest full-year guidance raise 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 25.7% since reporting and currently trades at $398.05.
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Best Q2: Caterpillar (NYSE:CAT)
With its iconic yellow machinery working on construction sites, Caterpillar (NYSE:CAT) manufactures construction equipment like bulldozers, excavators, and parts and maintenance services.Caterpillar reported revenues of $16.69 billion, down 3.6% year on year, in line with analysts’ expectations. The business performed better than its peers, but it was unfortunately a mixed quarter with an impressive beat of analysts’ operating margin estimates but a miss of analysts’ organic revenue estimates.
The market seems happy with the results as the stock is up 25.7% since reporting. It currently trades at $398.05.
Weakest Q2: Manitowoc (NYSE:MTW)
Contracted by the United States Navy during WWII, Manitowoc (NYSE:MTW) provides cranes and lifting equipment.Manitowoc reported revenues of $562.1 million, down 6.8% year on year, falling short of analysts’ expectations by 6%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations and underwhelming earnings guidance for the full year.
Manitowoc delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. As expected, the stock is down 12.3% since the results and currently trades at $9.44.
Astec (NASDAQ:ASTE)
Inventing the first ever double-barrel hot-mix asphalt plant, Astec (NASDAQ:ASTE) provides machines and equipment for building roads, processing raw materials, and producing concrete.Astec reported revenues of $345.5 million, down 1.3% year on year. This print beat analysts’ expectations by 4%. However, it was a mixed quarter as it produced a miss of analysts’ earnings estimates.
Astec delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is flat since reporting and currently trades at $31.10.
This content was originally published on Stock Story
