Q3 Earnings Outperformers: Atkore (NYSE:ATKR) And The Rest Of The Electrical Systems Stocks

December 13, 2024 at 05:48 AM EST

ATKR Cover Image

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how electrical systems stocks fared in Q3, starting with Atkore (NYSE: ATKR).

Like many equipment and component manufacturers, electrical systems companies are buoyed by secular trends such as connectivity and industrial automation. More specific pockets of strong demand include Internet of Things (IoT) connectivity and the 5G telecom upgrade cycle, which can benefit companies whose cables and conduits fit those needs. But like the broader industrials sector, these companies are also at the whim of economic cycles. Interest rates, for example, can greatly impact projects that drive demand for these products.

The 16 electrical systems stocks we track reported a mixed Q3. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 0.5% below.

Thankfully, share prices of the companies have been resilient as they are up 6.8% on average since the latest earnings results.

Atkore (NYSE: ATKR)

Protecting the things that power our world, Atkore (NYSE: ATKR) designs and manufactures electrical safety products.

Atkore reported revenues of $788.3 million, down 9.4% year on year. This print exceeded analysts’ expectations by 5.3%. Overall, it was a strong quarter for the company with a solid beat of analysts’ organic revenue estimates.

“Atkore achieved annual volume growth of 3.5% with contributions from each of our key product categories in fiscal 2024,” said Bill Waltz, Atkore President and Chief Executive Officer.

Interestingly, the stock is up 2% since reporting and currently trades at $85.82.

Is now the time to buy Atkore? Access our full analysis of the earnings results here, it’s free.

Best Q3: Methode Electronics (NYSE: MEI)

Founded in 1946, Methode Electronics (NYSE: MEI) is a global supplier of custom-engineered solutions for Original Equipment Manufacturers (OEMs).

Methode Electronics reported revenues of $292.6 million, up 1.6% year on year, outperforming analysts’ expectations by 9%. The business had an incredible quarter with an impressive beat of analysts’ EBITDA estimates.

Methode Electronics pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 12.9% since reporting. It currently trades at $13.12.

Is now the time to buy Methode Electronics? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: Napco (NASDAQ: NSSC)

Napco Security Technologies, Inc. (NASDAQ: NSSC) is a leading manufacturer and designer of high-tech electronic security devices, cellular communication services for intrusion and fire alarm systems, and school safety solutions.

Napco reported revenues of $44 million, up 5.6% year on year, falling short of analysts’ expectations by 5.5%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA estimates.

Napco delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 2.3% since the results and currently trades at $37.70.

Read our full analysis of Napco’s results here.

Hubbell (NYSE: HUBB)

A respected player in the electrical segment, Hubbell (NYSE: HUBB) manufactures electronic products for the construction, industrial, utility, and telecommunications markets.

Hubbell reported revenues of $1.44 billion, up 4.9% year on year. This print came in 2.7% below analysts' expectations. It was a slower quarter as it also recorded a significant miss of analysts’ organic revenue estimates.

The stock is up 1.9% since reporting and currently trades at $458.46.

Read our full, actionable report on Hubbell here, it’s free.

Benchmark Electronics (NYSE: BHE)

Based in Tempe, Arizona, Benchmark Electronics (NYSE: BHE) is a global provider of product design, engineering services, technology solutions, and manufacturing services.

Benchmark Electronics reported revenues of $657.7 million, down 8.6% year on year. This number beat analysts’ expectations by 1.2%. Overall, it was a satisfactory quarter as it also put up revenue guidance for next quarter meeting analysts’ expectations.

The stock is up 10% since reporting and currently trades at $49.99.

Read our full, actionable report on Benchmark Electronics here, it’s free.

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 has 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.

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