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Q1 Earnings Outperformers: Applied Industrial (NYSE:AIT) And The Rest Of The Engineered Components and Systems Stocks


Petr Huřťák /
2024/07/03 4:55 am EDT

As the Q1 earnings season wraps, let's dig into this quarter's best and worst performers in the engineered components and systems industry, including Applied Industrial (NYSE:AIT) 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 8 engineered components and systems stocks we track reported a slower Q1; on average, revenues were in line with analyst consensus estimates. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, and while some of the engineered components and systems stocks have fared somewhat better than others, they collectively declined, with share prices falling 1.2% on average since the previous earnings results.

Applied Industrial (NYSE:AIT)

Formerly called The Ohio Ball Bearing Company, Applied Industrial Technologies (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 $1.15 billion, up 1.3% year on year, topping analysts' expectations by 1.3%. It was a slower quarter for the company, with a miss of analysts' earnings estimates.

Neil A. Schrimsher, Applied’s President & Chief Executive Officer, commented, “Third quarter sales exceeded our expectations with the year-over-year trend gradually improving as the quarter progressed...”

Applied Industrial Total Revenue

The stock is up 3.2% since the results and currently trades at $191.93.

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

Best Q1: 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 $49.07 million, up 14% year on year, outperforming analysts' expectations by 10.3%. It was an incredible quarter for the company, with an impressive beat of analysts' earnings estimates.

Graham Corporation Total Revenue

Graham Corporation pulled off the biggest analyst estimates beat among its peers. The stock is up 9.2% since the results and currently trades at $28.42.

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

Weakest Q1: 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 $6.92 billion, down 20.7% year on year, falling short of analysts' expectations by 1.7%. It was a weak quarter for the company, with a miss of analysts' revenue estimates.

Arrow Electronics had the slowest revenue growth in the group. The stock is down 4.4% since the results and currently trades at $119.39.

Read our full analysis of Arrow Electronics's results here.

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 $161.3 million, up 13.1% year on year, in line with analysts' expectations. It was a solid quarter for the company, with an impressive beat of analysts' earnings estimates.

The stock is up 18.1% since the results and currently trades at $16.16.

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

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 $413.7 million, up 4.9% year on year, falling short of analysts' expectations by 0.1%. It was a mixed quarter for the company, with a miss of analysts' earnings estimates.

The stock is up 1.1% since the results and currently trades at $270.75.

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

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