As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the internet of things industry, including Emerson Electric (NYSE: EMR) and its peers.
Industrial Internet of Things (IoT) companies are buoyed by the secular trend of a more connected world. They often specialize in nascent areas such as hardware and services for factory automation, fleet tracking, or smart home technologies. Those who play their cards right can generate recurring subscription revenues by providing cloud-based software services, boosting their margins. On the other hand, if the technologies these companies have invested in don’t pan out, they may have to make costly pivots.
The 6 internet of things stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 9.8% on average since the latest earnings results.
Emerson Electric (NYSE: EMR)
Founded in 1890, Emerson Electric (NYSE: EMR) is a multinational technology and engineering company providing solutions in the industrial, commercial, and residential markets.
Emerson Electric reported revenues of $4.55 billion, up 3.9% year on year. This print fell short of analysts’ expectations by 0.8%. Overall, it was a slower quarter for the company with a miss of analysts’ EBITDA estimates and EPS guidance for next quarter slightly missing analysts’ expectations.
"Emerson's solid third quarter results reflect our sustained momentum, delivering strong underlying growth, profitability and cash flow, which we expect to continue as we finish the fiscal year," said Emerson President and Chief Executive Officer Lal Karsanbhai.
Unsurprisingly, the stock is down 5.7% since reporting and currently trades at $132.38.
Read our full report on Emerson Electric here, it’s free.
Best Q2: Rockwell Automation (NYSE: ROK)
One of the first companies to address industrial automation, Rockwell Automation (NYSE: ROK) sells products that help customers extract more efficiency from their machinery.
Rockwell Automation reported revenues of $2.14 billion, up 4.6% year on year, outperforming analysts’ expectations by 3.8%. The business had an exceptional quarter with a solid beat of analysts’ organic revenue estimates and an impressive beat of analysts’ EBITDA estimates.
The market seems content with the results as the stock is up 1.2% since reporting. It currently trades at $349.97.
Is now the time to buy Rockwell Automation? Access our full analysis of the earnings results here, it’s free.
Slowest Q2: SmartRent (NYSE: SMRT)
Founded by an employee at a real estate rental company, SmartRent (NYSE: SMRT) provides smart home devices and software for multifamily residential properties, single-family rental homes, and student housing communities.
SmartRent reported revenues of $38.31 million, down 21% year on year, falling short of analysts’ expectations by 1.4%. It was a softer quarter as it posted a significant miss of analysts’ EBITDA estimates and EPS in line with analysts’ estimates.
SmartRent delivered the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 52% since the results and currently trades at $1.49.
Read our full analysis of SmartRent’s results here.
AMETEK (NYSE: AME)
Started from its humble beginnings in motor repair, AMETEK (NYSE: AME) manufactures electronic devices used in industries like aerospace, power, and healthcare.
AMETEK reported revenues of $1.78 billion, up 2.5% year on year. This print beat analysts’ expectations by 2.8%. Overall, it was a strong quarter as it also put up an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.
The stock is up 4.9% since reporting and currently trades at $185.57.
Read our full, actionable report on AMETEK here, it’s free.
Trimble (NASDAQ: TRMB)
Playing a role in the construction of the Paris Grand, Trimble (NASDAQ: TRMB) offers geospatial devices and technology to the agriculture, construction, transportation, and logistics industries.
Trimble reported revenues of $875.7 million, flat year on year. This result topped analysts’ expectations by 4.9%. It was a very strong quarter as it also produced an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.
Trimble delivered the highest full-year guidance raise among its peers. The stock is down 2.2% since reporting and currently trades at $80.93.
Read our full, actionable report on Trimble 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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