As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at hvac and water systems stocks, starting with Northwest Pipe (NASDAQ:NWPX).
Many HVAC and water systems companies sell essential, non-discretionary infrastructure for buildings. Since the useful lives of these water heaters and vents are fairly standard, these companies have a portion of predictable replacement revenue. In the last decade, trends in energy efficiency and clean water are driving innovation that is leading to incremental demand. On the other hand, new installations for these companies are at the whim of residential and commercial construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates.
The 8 hvac and water systems stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 2.3%.
Inflation progressed towards the Fed’s 2% goal at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation. Thankfully, hvac and water systems stocks have been resilient with share prices up 7.9% on average since the latest earnings results.
Best Q2: Northwest Pipe (NASDAQ:NWPX)
Playing a large role in the Integrated Pipeline (IPL) project in Texas to deliver ~350 million gallons of water per day, Northwest Pipe (NASDAQ:NWPX) is a manufacturer of pipeline systems for water infrastructure.
Northwest Pipe reported revenues of $129.5 million, up 11.3% year on year. This print exceeded analysts’ expectations by 8.7%. Overall, it was an incredible quarter for the company with an impressive beat of analysts’ earnings estimates.
Interestingly, the stock is up 11.9% since reporting and currently trades at $42.69.
Is now the time to buy Northwest Pipe? Access our full analysis of the earnings results here, it’s free.
AAON (NASDAQ:AAON)
Backed by two million square feet of lab testing space, AAON (NASDAQ:AAON) makes heating, ventilation, and air conditioning equipment for different types of buildings.
AAON reported revenues of $313.6 million, up 10.4% year on year, outperforming analysts’ expectations by 10.5%. The business had a stunning quarter with an impressive beat of analysts’ earnings estimates.
AAON delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 14.9% since reporting. It currently trades at $99.76.
Is now the time to buy AAON? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Carrier Global (NYSE:CARR)
Founded by the inventor of air conditioning, Carrier Global (NYSE:CARR) manufactures heating, ventilation, air conditioning, and refrigeration products.
Carrier Global reported revenues of $6.69 billion, up 11.6% year on year, falling short of analysts’ expectations by 5.4%. It was a slower quarter as it posted a miss of analysts’ organic revenue estimates. Looking ahead, its full-year revenue guidance also missed analysts’ expectations.
Carrier Global delivered the fastest revenue growth but had the weakest performance against analyst estimates in the group. Interestingly, the stock is up 18.1% since the results and currently trades at $77.94.
Read our full analysis of Carrier Global’s results here.
Advanced Drainage (NYSE:WMS)
Originally started as a farm water drainage company, Advanced Drainage Systems (NYSE:WMS) provides clean water management solutions to communities across America.
Advanced Drainage reported revenues of $815.3 million, up 4.8% year on year. This print missed analysts’ expectations by 2%. It was a slower quarter as it also recorded a miss of analysts’ Pipe revenue estimates and full-year revenue guidance missing analysts’ expectations.
Advanced Drainage had the weakest full-year guidance update among its peers. The stock is flat since reporting and currently trades at $148.42.
Read our full, actionable report on Advanced Drainage here, it’s free.
CSW (NASDAQ:CSWI)
With over two centuries of combined operations manufacturing and supplying, CSW (NASDAQ:CSWI) offers special chemicals, coatings, sealants, and lubricants for various industries.
CSW reported revenues of $226.2 million, up 11.2% year on year. This print surpassed analysts’ expectations by 4.9%. It was an exceptional quarter as it also logged a solid beat of analysts’ earnings estimates.
The stock is up 14.8% since reporting and currently trades at $344.
Read our full, actionable report on CSW here, it’s free.
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