As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the heavy transportation equipment industry, including Commercial Vehicle Group (NASDAQ: CVGI) and its peers.
Heavy transportation equipment companies are investing in automated vehicles that increase efficiencies and connected machinery that collects actionable data. Some are also developing electric vehicles and mobility solutions to address customers’ concerns about carbon emissions, creating new sales opportunities. Additionally, they are increasingly offering automated equipment that increases efficiencies and connected machinery that collects actionable data. On the other hand, heavy transportation equipment companies are at the whim of economic cycles. Interest rates, for example, can greatly impact the construction and transport volumes that drive demand for these companies’ offerings.
The 13 heavy transportation equipment stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 2.6%.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Commercial Vehicle Group (NASDAQ: CVGI)
Formed from a partnership between two distinct companies, CVG (NASDAQ: CVGI) offers various components used in vehicles and systems used in warehouses.
Commercial Vehicle Group reported revenues of $172 million, down 11.2% year on year. This print exceeded analysts’ expectations by 6.4%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ revenue estimates and full-year EBITDA guidance exceeding analysts’ expectations.
James Ray, President and Chief Executive Officer, said, “Despite continued macroeconomic volatility, particularly a softening in Construction and Agriculture and Class 8 end markets and ongoing concerns around tariff impacts, we were pleased with continued momentum in our second quarter results, which were highlighted by strong free cash generation. During the quarter, we made progress in implementing operational improvements and right sizing our manufacturing footprint, which drove sequential gross margin improvement for the second consecutive quarter. Additionally, as part of our efforts to preserve margin performance, we are continuing our efforts to further reduce our targeted SG&A levels, and we are having constructive negotiations with customers as it relates to mitigating tariff impacts.”
Unsurprisingly, the stock is down 14% since reporting and currently trades at $1.60.
Is now the time to buy Commercial Vehicle Group? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q2: Cummins (NYSE: CMI)
With more than half of the heavy-duty truck market using its engines at one point, Cummins (NYSE: CMI) offers engines and power systems.
Cummins reported revenues of $8.64 billion, down 1.7% year on year, outperforming analysts’ expectations by 3.4%. The business had an incredible quarter with an impressive beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 15.9% since reporting. It currently trades at $419.24.
Is now the time to buy Cummins? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: Trinity (NYSE: TRN)
Operating under the trade name TrinityRail, Trinity (NYSE: TRN) is a provider of railcar products and services in North America.
Trinity reported revenues of $506.2 million, down 39.8% year on year, falling short of analysts’ expectations by 13.3%. It was a slower quarter as it posted a significant miss of analysts’ revenue and EPS estimates.
Trinity delivered the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 8.6% since the results and currently trades at $27.15.
Read our full analysis of Trinity’s results here.
Oshkosh (NYSE: OSK)
Oshkosh (NYSE: OSK) manufactures specialty vehicles for the defense, fire, emergency, and commercial industry, operating various brand subsidiaries within each industry.
Oshkosh reported revenues of $2.73 billion, down 4% year on year. This result beat analysts’ expectations by 0.7%. Overall, it was a stunning quarter as it also recorded a solid beat of analysts’ backlog estimates and an impressive beat of analysts’ EBITDA estimates.
The stock is down 2.8% since reporting and currently trades at $123.
Read our full, actionable report on Oshkosh here, it’s free for active Edge members.
Federal Signal (NYSE: FSS)
Developing sirens that warned of air raid attacks or fallout during the Cold War, Federal Signal (NYSE: FSS) provides safety and emergency equipment for government agencies, municipalities, and industrial companies.
Federal Signal reported revenues of $564.6 million, up 15.1% year on year. This print topped analysts’ expectations by 5.2%. It was a stunning quarter as it also produced an impressive beat of analysts’ revenue estimates and full-year EPS guidance exceeding analysts’ expectations.
The stock is up 10.6% since reporting and currently trades at $115.94.
Read our full, actionable report on Federal Signal here, it’s free for active Edge members.
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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