Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Novanta (NASDAQ: NOVT) and its peers.
Like many equipment and component manufacturers, electronic components companies are buoyed by secular trends such as connectivity and industrial automation. More specific pockets of strong demand include data centers and telecommunications, which can benefit companies whose optical and transceiver offerings fit those markets. But like the broader industrials sector, these companies are also at the whim of economic cycles. Consumer spending, for example, can greatly impact these companies’ volumes.
The 10 electronic components stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 4.8% while next quarter’s revenue guidance was in line.
Luckily, electronic components stocks have performed well with share prices up 21.2% on average since the latest earnings results.
Weakest Q2: Novanta (NASDAQ: NOVT)
Originally a pioneer in the laser scanning industry during the late 1960s, Novanta (NASDAQ: NOVT) offers medicine and manufacturing technology to the medical, life sciences, and manufacturing industries.
Novanta reported revenues of $241 million, up 2.2% year on year. This print exceeded analysts’ expectations by 1.3%. Despite the top-line beat, it was still a slower quarter for the company with EBITDA guidance for next quarter missing analysts’ expectations.
“Novanta delivered solid second quarter financial results, meeting or exceeding expectations in revenue, margins, and profitability, while rapidly adapting to the ongoing challenging macroeconomic environment,” said Matthijs Glastra, Chair and Chief Executive Officer of Novanta.
Unsurprisingly, the stock is down 6.6% since reporting and currently trades at $115.94.
Read our full report on Novanta here, it’s free.
Best Q2: Bel Fuse (NASDAQ: BELFA)
Founded by 26-year-old Elliot Bernstein during the electronics boom after WW2, Bel Fuse (NASDAQ: BELF.A) provides electronic systems and devices to the telecommunications, networking, transportation, and industrial sectors.
Bel Fuse reported revenues of $168.3 million, up 26.3% year on year, outperforming analysts’ expectations by 10.1%. The business had an incredible quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Bel Fuse delivered the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 31.6% since reporting. It currently trades at $121.72.
Is now the time to buy Bel Fuse? Access our full analysis of the earnings results here, it’s free.
Vicor (NASDAQ: VICR)
Founded by a researcher at the Massachusetts Institute of Technology, Vicor (NASDAQ: VICR) provides electrical power conversion and delivery products for a range of industries.
Vicor reported revenues of $96.05 million, up 11.9% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted a beat of analysts’ EPS estimates but a significant miss of analysts’ EBITDA estimates.
Vicor delivered the weakest performance against analyst estimates in the group. Interestingly, the stock is up 15% since the results and currently trades at $51.89.
Read our full analysis of Vicor’s results here.
Corning (NYSE: GLW)
Supplying windows for some of the United States’s earliest spacecraft, Corning (NYSE: GLW) provides glass and other electronic components for the consumer electronics, telecommunications, automotive, and healthcare industries.
Corning reported revenues of $4.05 billion, up 24.4% year on year. This number surpassed analysts’ expectations by 4.6%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ EBITDA estimates.
The stock is up 40.4% since reporting and currently trades at $77.87.
Read our full, actionable report on Corning here, it’s free.
Littelfuse (NASDAQ: LFUS)
The developer of the first blade-type automotive fuse, Littelfuse (NASDAQ: LFUS) provides electrical protection and control components for the automotive, industrial, electronics, and telecommunications industries.
Littelfuse reported revenues of $613.4 million, up 9.8% year on year. This result topped analysts’ expectations by 6.8%. It was an exceptional quarter as it also produced EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.
The stock is up 11.5% since reporting and currently trades at $262.81.
Read our full, actionable report on Littelfuse here, it’s free.
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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