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Unpacking Q1 Earnings: Lincoln Electric (NASDAQ:LECO) In The Context Of Other Professional Tools and Equipment Stocks


Kayode Omotosho /
2024/07/08 3:46 am EDT

As the Q1 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 9 professional tools and equipment stocks we track reported a mixed Q1; on average, revenues missed analyst consensus estimates by 0.7%. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and professional tools and equipment stocks have had a rough stretch, with share prices down 11.1% on average since the previous earnings results.

Lincoln Electric (NASDAQ:LECO)

Famous for its “guaranteed employment” policy of not laying off its employees during the Great Company, Lincoln Electric (NASDAQGS:LECO) manufactures and sells welding equipment for various industries.

Lincoln Electric reported revenues of $981.2 million, down 5.6% year on year, falling short of analysts' expectations by 5.7%. It was a weak quarter for the company, with a miss of analysts' organic revenue estimates.

“We achieved record first quarter earnings and cash flow generation as strong execution and effective cost management mitigated slower sales performance as we start the year,” commented Steven B. Hedlund, President and Chief Executive Officer.

Lincoln Electric Total Revenue

Lincoln Electric delivered the weakest performance against analyst estimates of the whole group. The stock is down 22.1% since the results and currently trades at $185.

Is now the time to buy Lincoln Electric? Access our full analysis of the earnings results here, it's free.

Best Q1: 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 $1.06 billion, up 5.7% year on year, outperforming analysts' expectations by 2.4%. It was a stunning quarter for the company, with revenue and EPS exceeding analysts' expectations.

Hyster-Yale Materials Handling Total Revenue

Hyster-Yale Materials Handling pulled off the fastest revenue growth among its peers. The stock is up 12.9% since the results and currently trades at $66.74.

Is now the time to buy Hyster-Yale Materials Handling? Access our full analysis of the earnings results here, it's free.

Weakest Q1: 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 $926.9 million, down 8% year on year, falling short of analysts' expectations by 5.5%. It was a weak quarter for the company, with a miss of analysts' earnings and organic revenue estimates.

Middleby had the slowest revenue growth in the group. The stock is down 16.1% since the results and currently trades at $119.13.

Read our full analysis of Middleby's results here.

Nordson (NASDAQ:NDSN)

Originally started in a basement during the Great Depression, Nordson (NASDAQGS:NDSN) manufactures engineered components and specialized equipment for numerous industries.

Nordson reported revenues of $650.6 million, flat year on year, falling short of analysts' expectations by 2.2%. It was a slower quarter for the company, with some shareholders hoping for a better result.

The stock is down 16.2% since the results and currently trades at $224.8.

Read our full, actionable report on Nordson here, it's free.

ESAB (NYSE:ESAB)

Having played a significant role in the construction of the iconic Sydney Opera House, ESAB (NYSE:ESAB) manufactures and sells welding and cutting equipment for numerous industries.

ESAB reported revenues of $689.7 million, flat year on year, surpassing analysts' expectations by 5.5%. 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.

ESAB delivered the biggest analyst estimates beat among its peers. The stock is down 13.1% since the results and currently trades at $91.98.

Read our full, actionable report on ESAB here, it's free.

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