The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how engineered components and systems stocks fared in Q1, starting with Arrow Electronics (NYSE:ARW).
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 11 engineered components and systems stocks we track reported a slower Q1; on average, revenues were in line with analyst consensus estimates. 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, but engineered components and systems stocks have shown resilience, with share prices up 8% on average since the previous earnings results.
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%. Overall, it was a weak quarter for the company with a miss of analysts' Components revenue estimates.
Arrow Electronics delivered the slowest revenue growth of the whole group. The stock is down 3.8% since reporting and currently trades at $120.22.
Read our full report on Arrow Electronics 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 scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 23.2% since reporting. It currently trades at $32.05.
Is now the time to buy Graham Corporation? Access our full analysis of the earnings results here, it's free.
Weakest Q1: Enpro (NYSE:NPO)
Holding a Guinness World Record for creating the world's largest gasket, Enpro (NYSE:NPO) designs, manufactures, and sells products used for machinery in various industries.
Enpro reported revenues of $257.5 million, down 8.9% year on year, falling short of analysts' expectations by 4.2%. It was a weak quarter for the company with a miss of analysts' earnings estimates.
Interestingly, the stock is up 8.9% since the results and currently trades at $167.18.
Read our full analysis of Enpro's results here.
Regal Rexnord (NYSE:RRX)
Headquartered in Milwaukee, Regal Rexnord (NYSE:RRX) provides power transmission and industrial automation products.
Regal Rexnord reported revenues of $1.55 billion, up 26.4% year on year, falling short of analysts' expectations by 1.4%. Taking a step back, it was a weaker quarter for the company with a miss of analysts' organic revenue estimates.
Regal Rexnord achieved the fastest revenue growth among its peers. The stock is down 10.6% since reporting and currently trades at $150.91.
Read our full, actionable report on Regal Rexnord here, it's free.
ESCO (NYSE:ESE)
A developer of the communication systems used in the Batmobile of “The Dark Knight,” ESCO (NYSE:ESE) is a provider of engineered components for the aerospace, defense, and utility sectors.
ESCO reported revenues of $249.1 million, up 8.7% year on year, in line with analysts' expectations. Taking a step back, it was an ok quarter for the company with a decent beat of analysts' earnings estimates.
The stock is up 9.7% since reporting and currently trades at $122.21.
Read our full, actionable report on ESCO here, it's free.
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