Wrapping up Q2 earnings, we look at the numbers and key takeaways for the engineered components and systems stocks, including Worthington (NYSE: WOR) and its peers.
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 along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.
In light of this news, share prices of the companies have held steady as they are up 2.8% on average since the latest earnings results.
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 $317.9 million, flat year on year. This print exceeded analysts’ expectations by 5.6%. Overall, it was a very strong quarter for the company with a beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.
“We closed fiscal 2025 with a strong fourth quarter, delivering year-over-year and sequential growth in adjusted EBITDA, adjusted EPS and free cash flow,” said Worthington Enterprises President and CEO Joe Hayek.
Interestingly, the stock is up 11.5% since reporting and currently trades at $67.05.
Is now the time to buy Worthington? Access our full analysis of the earnings results here, it’s free.
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 $7.58 billion, up 10% year on year, outperforming analysts’ expectations by 5.9%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ ECS revenue estimates.
Arrow Electronics scored the biggest analyst estimates beat among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $130.07.
Is now the time to buy Arrow Electronics? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $296.3 million, up 13.6% year on year, falling short of analysts’ expectations by 7%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
ESCO delivered the fastest revenue growth but had the weakest performance against analyst estimates in the group. Interestingly, the stock is up 2.6% since the results and currently trades at $195.29.
Read our full analysis of ESCO’s results here.
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 $288.1 million, up 6% year on year. This result surpassed analysts’ expectations by 1.9%. Aside from that, it was a slower quarter as it logged full-year revenue guidance missing analysts’ expectations significantly and a miss of analysts’ EBITDA estimates.
Enpro had the weakest full-year guidance update among its peers. The stock is up 5.8% since reporting and currently trades at $227.49.
Read our full, actionable report on Enpro here, it’s free.
Timken (NYSE: TKR)
Established after the founder noticed the difficulty freight wagons had making sharp turns, Timken (NYSE: TKR) is a provider of industrial parts used across various sectors.
Timken reported revenues of $1.17 billion, flat year on year. This number beat analysts’ expectations by 2.3%. Zooming out, it was a satisfactory quarter as it also logged an impressive beat of analysts’ EBITDA estimates but full-year EPS guidance missing analysts’ expectations.
The stock is down 2.4% since reporting and currently trades at $78.99.
Read our full, actionable report on Timken here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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