Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at RBC Bearings (NYSE:RBC) 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 slower Q3. As a group, revenues missed analysts’ consensus estimates by 2% while next quarter’s revenue guidance was 1.9% below.
Thankfully, share prices of the companies have been resilient as they are up 7.1% on average since the latest earnings results.
RBC Bearings (NYSE:RBC)
With a Guinness World Record for engineering the largest spherical plain bearing, RBC Bearings (NYSE:RBC) is a manufacturer of bearings and related components for the aerospace & defense, industrial, and transportation industries.
RBC Bearings reported revenues of $397.9 million, up 3.2% year on year. This print fell short of analysts’ expectations by 1.6%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ adjusted operating income estimates.
“RBC delivered another quarter of strong operational performance with total A&D sales up 12.5% year over year and Industrial sales down only 1.4% year over year,” said Dr. Michael J. Hartnett, Chairman and Chief Executive Officer.
Interestingly, the stock is up 18.8% since reporting and currently trades at $333.20.
Is now the time to buy RBC Bearings? Access our full analysis of the earnings results here, it’s free.
Best Q3: 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 $53.56 million, up 18.8% year on year, outperforming analysts’ expectations by 7.8%. The business had an exceptional quarter with an impressive beat of analysts’ EPS and EBITDA estimates.
Graham Corporation pulled off the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 36.8% since reporting. It currently trades at $45.49.
Is now the time to buy Graham Corporation? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: 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 $135.4 million, down 14.4% year on year, falling short of analysts’ expectations by 14.1%. It was a disappointing quarter as it posted a miss of analysts’ Commercial Vehicle revenue estimates and full-year revenue guidance missing analysts’ expectations significantly.
Mayville Engineering delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 21.9% since the results and currently trades at $16.99.
Read our full analysis of Mayville Engineering’s results here.
Park-Ohio (NASDAQ:PKOH)
Based in Cleveland, Park-Ohio (NASDAQ:PKOH) provides supply chain management services, capital equipment, and manufactured components.
Park-Ohio reported revenues of $417.6 million, flat year on year. This result missed analysts’ expectations by 4.8%. Taking a step back, it was still a strong quarter as it produced a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ EPS estimates.
The stock is flat since reporting and currently trades at $33.04.
Read our full, actionable report on Park-Ohio here, it’s free.
Applied Industrial (NYSE:AIT)
Formerly called The Ohio Ball Bearing Company, Applied Industrial (NYSE:AIT) distributes industrial products–everything from power tools to industrial valves–and services to a wide variety of industries.
Applied Industrial reported revenues of $1.10 billion, flat year on year. This print beat analysts’ expectations by 1.5%. Zooming out, it was a mixed quarter as it also produced a narrow beat of analysts’ organic revenue estimates but a miss of analysts’ adjusted operating income estimates.
The stock is up 24.3% since reporting and currently trades at $278.21.
Read our full, actionable report on Applied Industrial here, it’s free.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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