The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Mayville Engineering (NYSE:MEC) and the rest of the engineered components and systems stocks fared in Q2.
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 13 engineered components and systems stocks we track reported a mixed Q2. As a group, revenues missed analysts’ consensus estimates by 0.9% 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. Thankfully, engineered components and systems stocks have been resilient with share prices up 6.6% on average since the latest earnings results.
Mayville Engineering (NYSE:MEC) Originally founded solely on tool and die manufacturing, Mayville Engineering Company (NYSE:MEC) specializes in metal fabrication, tube bending, and welding to be used in various industries.
Mayville Engineering reported revenues of $163.6 million, up 17.7% year on year. This print exceeded analysts’ expectations by 2.8%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EPS estimates.
“We continued to demonstrate strong strategic execution during the second quarter, as net sales, margin realization, and free cash generation each increased significantly above prior-year levels,” stated Jag Reddy, President and Chief Executive Officer.
Mayville Engineering scored the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 15.9% since reporting and currently trades at $19.42.
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Best Q2: Arrow Electronics (NYSE:ARW) Founded as a single retail store, Arrow Electronics (NYSE:ARW) provides electronic components and enterprise computing solutions to businesses globally.
Arrow Electronics reported revenues of $6.89 billion, down 19% year on year, outperforming analysts’ expectations by 5.7%. It was an exceptional quarter for the company with an impressive beat of analysts’ earnings estimates.
Arrow Electronics scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 5.6% since reporting. It currently trades at $130.62.
Weakest Q2: Worthington (NYSE:WOR) Founded by a steel salesman, Worthington (NYSE:WOR) specializes in steel processing, pressure cylinders, and engineered cabs for commercial markets.
Worthington reported revenues of $318.8 million, down 13.6% year on year, falling short of analysts’ expectations by 9.6%. It was a weak quarter for the company with a miss of analysts’ earnings estimates.
Worthington had the weakest performance against analyst estimates in the group. As expected, the stock is down 10.4% since the results and currently trades at $44.91.
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 $271.9 million, down 1.8% year on year, in line with analysts’ expectations. Overall, it was a strong quarter for the company with a solid beat of analysts’ earnings estimates and in-line EBITDA guidance for the full year.
The stock is up 9.8% since reporting and currently trades at $160.34.
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 $49.95 million, up 5% year on year, in line with analysts’ expectations. Overall, it was a mixed quarter for the company with an impressive beat of analysts’ earnings estimates but underwhelming EBITDA guidance for the full year.
Graham Corporation had the weakest full-year guidance update among its peers. The stock is up 6% since reporting and currently trades at $30.79.
This content was originally published on Stock Story
