As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the professional tools and equipment industry, including Lincoln Electric (NASDAQ:LECO) 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 decent Q2. As a group, revenues beat analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was 0.9% below.
Stocks--especially those trading at higher multiples--had a strong end of 2023, but this year has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and while some professional tools and equipment stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.6% since the latest earnings results.
Lincoln Electric (NASDAQ:LECO) Headquartered in Ohio, Lincoln Electric (NASDAQ:LECO) manufactures and sells welding equipment for various industries.
Lincoln Electric reported revenues of $1.02 billion, down 3.7% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a narrow beat of analysts’ earnings estimates but a miss of analysts’ organic revenue estimates.
“Our solid second quarter profit, earnings and cash conversion results demonstrate the team’s effective cost management and execution of our strategic initiatives while navigating a more challenging portion of the cycle,” stated Steven B. Hedlund, President and Chief Executive Officer.
Unsurprisingly, the stock is down 8.2% since reporting and currently trades at $194.27.
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Best Q2: 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 $1.12 billion, up 2.5% year on year, outperforming analysts’ expectations by 3.5%. It was an incredible quarter for the company with an impressive beat of analysts’ earnings estimates.
Hyster-Yale Materials Handling achieved the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 9.5% since reporting. It currently trades at $62.96.
Weakest Q2: 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 $1.55 billion, up 1.7% year on year, in line with analysts’ expectations. It was a slower quarter for the company with revenue guidance for next quarter missing analysts’ expectations and a miss of analysts’ organic revenue estimates.
As expected, the stock is down 2.9% since the results and currently trades at $74.40.
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 $1.28 billion, flat year on year, surpassing analysts’ expectations by 6.9%. Overall, it was a slower quarter for the company with a miss of analysts’ organic revenue estimates.
Snap-on delivered the biggest analyst estimates beat among its peers. The stock is up 2.6% since reporting and currently trades at $282.77.
Middleby (NASDAQ:MIDD) Holding a Guinness World Record for creating the world’s fastest conveyor pizza oven, Middleby (NYSE:MIDD) is a food service and equipment manufacturer.
Middleby reported revenues of $991.5 million, down 4.7% year on year, in line with analysts’ expectations. More broadly, it was a decent quarter for the company with a solid beat of analysts’ operating margin estimates but a miss of analysts’ organic revenue estimates.
Middleby had the slowest revenue growth among its peers. The stock is flat since reporting and currently trades at $137.
This content was originally published on Stock Story
