HVAC and Water Systems Stocks Q4 Earnings: Trane Technologies (NYSE:TT) Best of the Bunch
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 Q4. Today, we are looking at hvac and water systems stocks, starting with Trane Technologies (NYSE:TT).
Many HVAC and water systems companies sell essential, non-discretionary infrastructure for buildings. Since the useful lives of these water heaters and vents are fairly standard, these companies have a portion of predictable replacement revenue. In the last decade, trends in energy efficiency and clean water are driving innovation that is leading to incremental demand. On the other hand, new installations for these companies are at the whim of residential and commercial construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates.
The 9 hvac and water systems stocks we track reported a mixed Q4. As a group, revenues were in line with analysts’ consensus estimates.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 11.4% since the latest earnings results.
Best Q4: Trane Technologies (NYSE:TT)
With low-pressure heating systems as the first product, Trane (NYSE:TT) designs, manufactures, and sells HVAC and refrigeration systems, the former to commercial and residential building customers and the latter to commercial truck manufacturers.
Trane Technologies reported revenues of $4.87 billion, up 10.2% year on year. This print exceeded analysts’ expectations by 1.9%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA estimates and full-year EPS guidance slightly topping analysts’ expectations.
Trane Technologies Total Revenue
The stock is down 5.2% since reporting and currently trades at $345.25.
Playing a large role in the Integrated Pipeline (IPL) project in Texas to deliver ~350 million gallons of water per day, Northwest Pipe (NASDAQ:NWPX) is a manufacturer of pipeline systems for water infrastructure.
Northwest Pipe reported revenues of $119.6 million, up 8.6% year on year, falling short of analysts’ expectations by 0.6%. The business performed better than its peers, but it was unfortunately a mixed quarter with a solid beat of analysts’ EBITDA estimates but a significant miss of analysts’ EPS estimates.
Northwest Pipe Total Revenue
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 15% since reporting. It currently trades at $40.80.
Credited with the invention of the glass-lined water heater, A.O. Smith (NYSE:AOS) manufactures water heating and treatment products for various industries.
A. O. Smith reported revenues of $912.4 million, down 7.7% year on year, falling short of analysts’ expectations by 4.7%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
A. O. Smith delivered the slowest revenue growth and weakest full-year guidance update in the group. As expected, the stock is down 5.5% since the results and currently trades at $65.42.
Backed by two million square feet of lab testing space, AAON (NASDAQ:AAON) makes heating, ventilation, and air conditioning equipment for different types of buildings.
AAON reported revenues of $297.7 million, down 2.9% year on year. This result came in 7.1% below analysts' expectations. It was a disappointing quarter as it also recorded a significant miss of analysts’ EBITDA and EPS estimates.
AAON had the weakest performance against analyst estimates among its peers. The stock is down 27.6% since reporting and currently trades at $73.88.
Claiming to have saved more than 30 billion gallons of water, Zurn Elkay (NYSE:ZWS) provides water management solutions to various industries.
Zurn Elkay reported revenues of $370.7 million, up 3.9% year on year. This number topped analysts’ expectations by 0.9%. Taking a step back, it was a mixed quarter as it also produced a solid beat of analysts’ EPS estimates but a significant miss of analysts’ organic revenue estimates.
The stock is down 12.2% since reporting and currently trades at $34.68.
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