Wrapping up Q3 earnings, we look at the numbers and key takeaways for the engineered components and systems stocks, including Regal Rexnord (NYSE: RRX) and its peers.

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 12 engineered components and systems stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 1.5% while next quarter’s revenue guidance was 0.5% below.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.1% since the latest earnings results.

Regal Rexnord (NYSE: RRX)

Headquartered in Milwaukee, Regal Rexnord (NYSE: RRX) provides power transmission and industrial automation products.

Regal Rexnord reported revenues of $1.50 billion, up 1.3% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with full-year EPS guidance missing analysts’ expectations and a miss of analysts’ adjusted operating income estimates.

CEO Louis Pinkham commented, "Our enterprise gained significant momentum in the third quarter by delivering very strong orders, nicely above our expectations. The highlight is positive momentum in data center, where we secured orders worth $135 million in 3Q, plus an additional $60 million to date in 4Q. These orders came in the AMC and PES segments, and we see opportunities in IPS as well. We have been making growth investments in the data center market, which are paying off, and we have plans to do much more. Our capabilities here are positioning us as an emerging scale player, with a bid pipeline that is now over $1 billion."

Unsurprisingly, the stock is down 7.7% since reporting and currently trades at $139.00.

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

Best Q3: Timken (NYSE: TKR)

Established after the founder noticed the difficulty freight wagons had making sharp turns, Timken (NYSE: TKR) is a provider of industrial parts used across various sectors.

Timken reported revenues of $1.16 billion, up 2.7% year on year, outperforming analysts’ expectations by 3.6%. The business had an exceptional quarter with a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ revenue estimates.

The market seems content with the results as the stock is up 2.5% since reporting. It currently trades at $79.12.

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

Weakest Q3: Park-Ohio (NASDAQ: PKOH)

Based in Cleveland, Park-Ohio (NASDAQ: PKOH) provides supply chain management services, capital equipment, and manufactured components.

Park-Ohio reported revenues of $398.6 million, down 4.5% year on year, falling short of analysts’ expectations by 4.5%. It was a disappointing quarter as it posted full-year EPS guidance missing analysts’ expectations and a significant miss of analysts’ revenue estimates.

As expected, the stock is down 5.2% since the results and currently trades at $20.00.

Read our full analysis of Park-Ohio’s results here.

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 $66.03 million, up 23.3% year on year. This number beat analysts’ expectations by 14.7%. It was a strong quarter as it also recorded an impressive beat of analysts’ revenue estimates and a solid beat of analysts’ EBITDA estimates.

Graham Corporation delivered the biggest analyst estimates beat and fastest revenue growth, but had the weakest full-year guidance update among its peers. The stock is down 2.1% since reporting and currently trades at $60.99.

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

RBC Bearings (NYSE: RBC)

With a Guinness World Record for engineering the largest spherical plain bearing, RBC Bearings (NYSE: RBC) is a manufacturer of bearings and related components for the aerospace & defense, industrial, and transportation industries.

RBC Bearings reported revenues of $455.3 million, up 14.4% year on year. This print topped analysts’ expectations by 1.1%. More broadly, it was a satisfactory quarter as it also produced an impressive beat of analysts’ Aerospace and Defense revenue estimates but a miss of analysts’ Diversified Industrials revenue estimates.

The stock is up 9.5% since reporting and currently trades at $444.93.

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

Market Update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.