Laser Focus World is an industry bedrock—first published in 1965 and still going strong. We publish original articles about cutting-edge advances in lasers, optics, photonics, sensors, and quantum technologies, as well as test and measurement, and the shift currently underway to usher in the photonic integrated circuits, optical interconnects, and copackaged electronics and photonics to deliver the speed and efficiency essential for data centers of the future.

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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

Engineered Components and Systems Stocks Q1 Results: Benchmarking Arrow Electronics (NYSE:ARW)

ARW 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 engineered components and systems stocks fared in Q1, starting with Arrow Electronics (NYSE: ARW).

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 1.5% below.

Luckily, engineered components and systems stocks have performed well with share prices up 19.1% on average since the latest earnings results.

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 print exceeded analysts’ expectations by 7.2%. Overall, it was an exceptional quarter for the company with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

Arrow Electronics Total Revenue

Arrow Electronics scored the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 15% since reporting and currently trades at $127.81.

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

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 a solid beat of analysts’ organic revenue and EBITDA estimates.

Regal Rexnord Total Revenue

The market seems happy with the results as the stock is up 44.1% since reporting. It currently trades at $158.67.

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 estimates and a significant miss of analysts’ EPS estimates.

Park-Ohio delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 16.6% since the results and currently trades at $17.80.

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

Gates Industrial Corporation (NYSE: GTES)

Helping create one of the most memorable moments for the iconic “Jurassic Park” film, Gates (NYSE: GTES) offers power transmission and fluid transfer equipment for various industries.

Gates Industrial Corporation reported revenues of $847.6 million, down 1.7% year on year. This result beat analysts’ expectations by 2.9%. It was an exceptional quarter as it also produced an impressive beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ organic revenue estimates.

The stock is up 42.3% since reporting and currently trades at $25.50.

Read our full, actionable report on Gates Industrial Corporation here, it’s free.

Applied Industrial (NYSE: AIT)

Formerly called The Ohio Ball Bearing Company, Applied Industrial (NYSE: AIT) distributes industrial products–everything from power tools to industrial valves–and services to a wide variety of industries.

Applied Industrial reported revenues of $1.17 billion, up 1.8% year on year. This number met analysts’ expectations. Aside from that, it was a satisfactory quarter as it also produced an impressive beat of analysts’ adjusted operating income estimates but full-year EPS guidance meeting analysts’ expectations.

The stock is up 12.1% since reporting and currently trades at $272.13.

Read our full, actionable report on Applied Industrial 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 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 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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