Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at L.B. Foster (NASDAQ:FSTR) and the best and worst performers in the general industrial machinery industry.
Automation that increases efficiency and connected equipment that collects analyzable data have been trending, creating new demand for general industrial machinery companies. Those who innovate and create digitized solutions can spur sales and speed up replacement cycles, but all general industrial machinery companies are still 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 14 general industrial machinery stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was 4% below.
After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.
While some general industrial machinery stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.7% since the latest earnings results.
L.B. Foster (NASDAQ:FSTR)
Founded with a $2,500 loan, L.B. Foster (NASDAQ:FSTR) is a provider of products and services for the transportation and energy infrastructure sectors, including rail products, construction materials, and coating solutions.
L.B. Foster reported revenues of $140.8 million, down 4.9% year on year. This print exceeded analysts’ expectations by 2.5%. Despite the top-line beat, it was still a slower quarter for the company with a miss of analysts’ earnings estimates and full-year revenue guidance missing analysts’ expectations.
John Kasel, President and Chief Executive Officer, commented "After a strong start to the year in the first quarter, second quarter results were somewhat softer as compared to last year. Sales were down 4.9%, with organic sales down 3.4% and 1.5% lower sales from portfolio actions completed last year."
Unsurprisingly, the stock is down 2% since reporting and currently trades at $20.33.
Read our full report on L.B. Foster here, it’s free.
Best Q2: 3M (NYSE:MMM)
Producers of the first asthma inhaler, 3M Company (NYSE:MMM) is a global conglomerate known for products in industries like healthcare, safety, electronics, and consumer goods.
3M reported revenues of $6.02 billion, down 24.7% year on year, outperforming analysts’ expectations by 3.3%. The business had an exceptional quarter with an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ organic revenue estimates.
The market seems happy with the results as the stock is up 29.8% since reporting. It currently trades at $134.24.
Is now the time to buy 3M? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Hillenbrand (NYSE:HI)
Hillenbrand, Inc. (NYSE: HI) is an industrial company that designs, manufactures, and sells highly engineered processing equipment and solutions for various industries.
Hillenbrand reported revenues of $786.6 million, up 9.8% year on year, falling short of analysts’ expectations by 3.9%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations and a miss of analysts’ earnings estimates.
Hillenbrand delivered the weakest full-year guidance update in the group. As expected, the stock is down 27.8% since the results and currently trades at $27.44.
Read our full analysis of Hillenbrand’s results here.
Illinois Tool Works (NYSE:ITW)
Founded by Byron Smith, an investor who held over 100 patents, Illinois Tool Works (NYSE:ITW) manufactures engineered components and specialized equipment for numerous industries.
Illinois Tool Works reported revenues of $4.03 billion, down 1.2% year on year. This result came in 1.3% below analysts' expectations. It was a slower quarter as it also logged a miss of analysts’ organic revenue estimates.
The stock is up 4% since reporting and currently trades at $257.96.
Read our full, actionable report on Illinois Tool Works here, it’s free.
Columbus McKinnon (NASDAQ:CMCO)
With 19 different brands across the globe, Columbus McKinnon (NASDAQ:CMCO) offers material handling equipment for the construction, manufacturing, and transportation industries.
Columbus McKinnon reported revenues of $239.7 million, up 1.8% year on year. This number met analysts’ expectations. It was a satisfactory quarter as it also put up a solid beat of analysts’ operating margin estimates.
The stock is down 15% since reporting and currently trades at $33.33.
Read our full, actionable report on Columbus McKinnon here, it’s free.
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