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 electrical systems stocks fared in Q1, starting with Hubbell (NYSE: HUBB).
Like many equipment and component manufacturers, electrical systems companies are buoyed by secular trends such as connectivity and industrial automation. More specific pockets of strong demand include Internet of Things (IoT) connectivity and the 5G telecom upgrade cycle, which can benefit companies whose cables and conduits fit those needs. But like the broader industrials sector, these companies are also at the whim of economic cycles. Interest rates, for example, can greatly impact projects that drive demand for these products.
The 12 electrical systems stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was 2.8% below.
Luckily, electrical systems stocks have performed well with share prices up 12.1% on average since the latest earnings results.
Hubbell (NYSE: HUBB)
A respected player in the electrical segment, Hubbell (NYSE: HUBB) manufactures electronic products for the construction, industrial, utility, and telecommunications markets.
Hubbell reported revenues of $1.37 billion, down 2.4% year on year. This print fell short of analysts’ expectations by 1.3%. Overall, it was a slower quarter for the company with a significant miss of analysts’ EBITDA and EPS estimates.
“Our results in the first quarter were driven by continued strong operating performance in our Electrical Solutions segment and a return to organic growth in Grid Infrastructure, offset by anticipated softness in Grid Automation and the impact of higher cost inflation” said Gerben Bakker, Chairman, President and CEO.
Interestingly, the stock is up 8.1% since reporting and currently trades at $391.89.
Is now the time to buy Hubbell? Access our full analysis of the earnings results here, it’s free.
Best Q1: Kimball Electronics (NASDAQ: KE)
Founded in 1961, Kimball Electronics (NYSE: KE) is a global contract manufacturer specializing in electronics and manufacturing solutions for automotive, medical, and industrial markets.
Kimball Electronics reported revenues of $374.6 million, down 11.9% year on year, outperforming analysts’ expectations by 10.8%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Kimball Electronics achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 26.9% since reporting. It currently trades at $18.69.
Is now the time to buy Kimball Electronics? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Whirlpool (NYSE: WHR)
Credited with introducing the first automatic washing machine, Whirlpool (NYSE: WHR) is a manufacturer of a variety of home appliances.
Whirlpool reported revenues of $3.62 billion, down 19.4% year on year, falling short of analysts’ expectations by 1%. It was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations.
Whirlpool delivered the slowest revenue growth in the group. Interestingly, the stock is up 19% since the results and currently trades at $92.41.
Read our full analysis of Whirlpool’s results here.
Atkore (NYSE: ATKR)
Protecting the things that power our world, Atkore (NYSE: ATKR) designs and manufactures electrical safety products.
Atkore reported revenues of $701.7 million, down 11.5% year on year. This result beat analysts’ expectations by 0.6%. It was a very strong quarter as it also logged a solid beat of analysts’ EBITDA estimates.
The stock is down 1.4% since reporting and currently trades at $65.98.
Read our full, actionable report on Atkore here, it’s free.
Allegion (NYSE: ALLE)
Allegion plc (NYSE: ALLE) is a provider of security products and solutions that keep people and assets safe and secure in various environments.
Allegion reported revenues of $941.9 million, up 5.4% year on year. This print topped analysts’ expectations by 2%. Overall, it was a very strong quarter as it also produced an impressive beat of analysts’ adjusted operating income estimates.
The stock is up 7.5% since reporting and currently trades at $136.10.
Read our full, actionable report on Allegion here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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