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 Q3. Today, we are looking at electrical systems stocks, starting with Methode Electronics (NYSE: MEI).

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 13 electrical systems stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.8% while next quarter’s revenue guidance was 1.2% below.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

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 $246.9 million, down 15.6% year on year. This print exceeded analysts’ expectations by 3.9%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ revenue estimates.

President and Chief Executive Officer Jon DeGaynor said, “Methode's transformation journey made further progress in the quarter and is on track. I am proud of the unwavering commitment and hard work that the Methode team has put into our transformation. The tangible improvements we have made are creating real value for our customers and shareholders. We are laser focused on improving execution and making Methode a more reliable and resilient company."

Methode Electronics delivered the slowest revenue growth and weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 22.4% since reporting and currently trades at $6.75.

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

Best Q3: Thermon (NYSE: THR)

Creating the first packaged tracing systems, Thermon (NYSE: THR) is a leading provider of engineered industrial process heating solutions for process industries.

Thermon reported revenues of $131.7 million, up 14.9% year on year, outperforming analysts’ expectations by 10.3%. The business had a stunning quarter with a beat of analysts’ EPS and EBITDA estimates.

Thermon pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 34.4% since reporting. It currently trades at $39.53.

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

Weakest Q3: Atkore (NYSE: ATKR)

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

Atkore reported revenues of $752 million, down 4.6% year on year, exceeding analysts’ expectations by 2.5%. Still, it was a slower quarter as it posted a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.

As expected, the stock is down 2.9% since the results and currently trades at $64.59.

Read our full analysis of Atkore’s results here.

Allegion (NYSE: ALLE)

Allegion plc (NYSE: ALLE) is a provider of security products and solutions that keep people and assets safe and secure in various environments.

Allegion reported revenues of $1.07 billion, up 10.7% year on year. This print surpassed analysts’ expectations by 2.5%. Overall, it was a strong quarter as it also recorded an impressive beat of analysts’ revenue estimates and a solid beat of analysts’ organic revenue estimates.

The stock is down 7% since reporting and currently trades at $163.19.

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

Whirlpool (NYSE: WHR)

Credited with introducing the first automatic washing machine, Whirlpool (NYSE: WHR) is a manufacturer of a variety of home appliances.

Whirlpool reported revenues of $4.03 billion, up 1% year on year. This number beat analysts’ expectations by 2.5%. It was a very strong quarter as it also logged a beat of analysts’ EPS estimates and full-year EPS guidance exceeding analysts’ expectations.

Whirlpool scored the highest full-year guidance raise among its peers. The stock is up 3.5% since reporting and currently trades at $76.39.

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

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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