As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the heavy transportation equipment industry, including Federal Signal (NYSE: FSS) and its peers.
Heavy transportation equipment companies are investing in automated vehicles that increase efficiencies and connected machinery that collects actionable data. Some are also developing electric vehicles and mobility solutions to address customers’ concerns about carbon emissions, creating new sales opportunities. Additionally, they are increasingly offering automated equipment that increases efficiencies and connected machinery that collects actionable data. On the other hand, heavy transportation equipment companies are at the whim of economic cycles. Interest rates, for example, can greatly impact the construction and transport volumes that drive demand for these companies’ offerings.
The 12 heavy transportation equipment stocks we track reported a mixed Q3. As a group, revenues missed analysts’ consensus estimates by 1.4%.
In light of this news, share prices of the companies have held steady as they are up 4.6% on average since the latest earnings results.
Federal Signal (NYSE: FSS)
Developing sirens that warned of air raid attacks or fallout during the Cold War, Federal Signal (NYSE: FSS) provides safety and emergency equipment for government agencies, municipalities, and industrial companies.
Federal Signal reported revenues of $555 million, up 17% year on year. This print exceeded analysts’ expectations by 1.9%. Overall, it was a strong quarter for the company with full-year EPS guidance beating analysts’ expectations and an impressive beat of analysts’ revenue estimates.
"Our businesses were able to deliver 17% year-over-year net sales growth, double-digit operating income improvement, and a 130-basis point increase in adjusted EBITDA margin during the third quarter," commented Jennifer L. Sherman, President and Chief Executive Officer.
Unsurprisingly, the stock is down 14.6% since reporting and currently trades at $110.86.
Best Q3: Cummins (NYSE: CMI)
With more than half of the heavy-duty truck market using its engines at one point, Cummins (NYSE: CMI) offers engines and power systems.
Cummins reported revenues of $8.32 billion, down 1.6% year on year, outperforming analysts’ expectations by 5%. The business had an exceptional quarter with an impressive beat of analysts’ EBITDA estimates and an impressive beat of analysts’ revenue estimates.
The market seems happy with the results as the stock is up 16% since reporting. It currently trades at $509.65.
Is now the time to buy Cummins? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: Wabash (NYSE: WNC)
With its first trailer reportedly built on two sawhorses, Wabash (NYSE: WNC) offers semi trailers, liquid transportation containers, truck bodies, and equipment for moving goods.
Wabash reported revenues of $381.6 million, down 17.8% year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations significantly and full-year EPS guidance missing analysts’ expectations significantly.
Wabash delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 12.2% since the results and currently trades at $9.33.
Read our full analysis of Wabash’s results here.
Blue Bird (NASDAQ: BLBD)
With around a century of experience, Blue Bird (NASDAQ: BLBD) is a manufacturer of school buses and complementary parts.
Blue Bird reported revenues of $409.4 million, up 16.9% year on year. This print beat analysts’ expectations by 7.7%. Overall, it was a very strong quarter as it also recorded a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Blue Bird pulled off the biggest analyst estimates beat among its peers. The stock is down 6.6% since reporting and currently trades at $51.24.
Read our full, actionable report on Blue Bird here, it’s free for active Edge members.
Douglas Dynamics (NYSE: PLOW)
Once manufacturing snowplows designed for the iconic jeep vehicle precursor, Douglas Dynamics (NYSE: PLOW) offers snow and ice equipment for the roads and sidewalks.
Douglas Dynamics reported revenues of $162.1 million, up 25.3% year on year. This number came in 0.7% below analysts' expectations. In spite of that, it was a strong quarter as it logged a solid beat of analysts’ EBITDA estimates and full-year EBITDA guidance slightly topping analysts’ expectations.
Douglas Dynamics scored the fastest revenue growth among its peers. The stock is up 7.2% since reporting and currently trades at $31.82.
Read our full, actionable report on Douglas Dynamics 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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