Looking back on professional tools and equipment stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including Stanley Black & Decker (NYSE: SWK) 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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.1% while next quarter’s revenue guidance was in line.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.7% since the latest earnings results.

Slowest Q3: Stanley Black & Decker (NYSE: SWK)

With an iconic “STANLEY” logo which has remained virtually unchanged for over a century, Stanley Black & Decker (NYSE: SWK) is a manufacturer primarily catering to the tool and outdoor equipment industry.

Stanley Black & Decker reported revenues of $3.76 billion, flat year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a beat of analysts’ EPS estimates but full-year EPS guidance slightly missing analysts’ expectations.

Christopher J. Nelson, Stanley Black & Decker's President & CEO, commented, "Stanley Black & Decker delivered solid third quarter results, despite prevailing macroeconomic uncertainty. Our performance included continued growth in our DEWALT brand, year over year gross margin expansion and solid free cash flow. The gross margin progress achieved during the third quarter illustrates our rapid and effective response to tariffs and our commitment to achieving our long-term financial objectives.

Stanley Black & Decker delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 5.2% since reporting and currently trades at $62.93.

Read our full report on Stanley Black & Decker here, it’s free for active Edge members.

Best Q3: Kennametal (NYSE: KMT)

Involved in manufacturing hard tips of anti-tank projectiles in World War II, Kennametal (NYSE: KMT) is a provider of industrial materials and tools for various sectors.

Kennametal reported revenues of $498 million, up 3.3% year on year, outperforming analysts’ expectations by 4.3%. The business had an incredible quarter with an impressive beat of analysts’ organic revenue estimates and EPS guidance for next quarter exceeding analysts’ expectations.

Kennametal delivered the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 15.1% since reporting. It currently trades at $25.45.

Is now the time to buy Kennametal? Access our full analysis of the earnings results here, it’s free for active Edge members.

Snap-on (NYSE: SNA)

Founded in 1920, Snap-on (NYSE: SNA) is a global provider of tools, equipment, and diagnostics for various industries such as vehicle repair, aerospace, and the military.

Snap-on reported revenues of $1.29 billion, up 3.6% year on year, exceeding analysts’ expectations by 2.7%. It was a satisfactory quarter as it also posted an impressive beat of analysts’ adjusted operating income estimates but a miss of analysts’ EBITDA estimates.

The stock is flat since the results and currently trades at $329.83.

Read our full analysis of Snap-on’s results here.

Lincoln Electric (NASDAQ: LECO)

Headquartered in Ohio, Lincoln Electric (NASDAQ: LECO) manufactures and sells welding equipment for various industries.

Lincoln Electric reported revenues of $1.06 billion, up 7.9% year on year. This number surpassed analysts’ expectations by 1.6%. Zooming out, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ organic revenue estimates but a slight miss of analysts’ EBITDA estimates.

The stock is down 5.4% since reporting and currently trades at $221.91.

Read our full, actionable report on Lincoln Electric here, it’s free for active Edge members.

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 $982.1 million, up 4.2% year on year. This result topped analysts’ expectations by 2.2%. Overall, it was a strong quarter as it also logged a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

The stock is down 9.6% since reporting and currently trades at $111.64.

Read our full, actionable report on Middleby here, it’s free for active Edge members.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

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