As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at engineered components and systems stocks, starting with Graham Corporation (NYSE: GHM).
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 13 engineered components and systems stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was 1.4% below.
Luckily, engineered components and systems stocks have performed well with share prices up 16.2% on average since the latest earnings results.
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 $59.35 million, up 20.9% year on year. This print exceeded analysts’ expectations by 6.6%. Overall, it was a stunning quarter for the company with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
“We closed fiscal 2025 with strong momentum, as our fourth quarter results reflected solid execution and sustained demand across our diversified product portfolio,” said Daniel J. Thoren, Chief Executive Officer.
Graham Corporation pulled off the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 20.9% since reporting and currently trades at $50.83.
Best Q1: Regal Rexnord (NYSE: RRX)
Headquartered in Milwaukee, Regal Rexnord (NYSE: RRX) provides power transmission and industrial automation products.
Regal Rexnord reported revenues of $1.42 billion, down 8.4% year on year, outperforming analysts’ expectations by 3%. The business had a stunning quarter with an impressive beat of analysts’ organic revenue and EBITDA estimates.
The market seems happy with the results as the stock is up 32.9% since reporting. It currently trades at $146.33.
Is now the time to buy Regal Rexnord? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $405.4 million, down 2.9% year on year, falling short of analysts’ expectations by 4.7%. It was a softer quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
Park-Ohio delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 14.8% since the results and currently trades at $18.18.
Read our full analysis of Park-Ohio’s results here.
Arrow Electronics (NYSE: ARW)
Founded as a single retail store, Arrow Electronics (NYSE: ARW) provides electronic components and enterprise computing solutions to businesses globally.
Arrow Electronics reported revenues of $6.81 billion, down 1.6% year on year. This number topped analysts’ expectations by 7.2%. Overall, it was an exceptional quarter as it also logged a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Arrow Electronics scored the biggest analyst estimates beat among its peers. The stock is up 18.7% since reporting and currently trades at $131.93.
Read our full, actionable report on Arrow Electronics here, it’s free.
Worthington (NYSE: WOR)
Founded by a steel salesman, Worthington (NYSE: WOR) specializes in steel processing, pressure cylinders, and engineered cabs for commercial markets.
Worthington reported revenues of $317.9 million, flat year on year. This print surpassed analysts’ expectations by 5.6%. It was a very strong quarter as it also recorded an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.
The stock is up 6.3% since reporting and currently trades at $63.96.
Read our full, actionable report on Worthington here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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