Let’s dig into the relative performance of LSI (NASDAQ:LYTS) and its peers as we unravel the now-completed Q1 electrical systems earnings season.
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 11 electrical systems stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 1.7% while next quarter’s revenue guidance was 2.9% below.
Luckily, electrical systems stocks have performed well with share prices up 12.3% on average since the latest earnings results.
LSI (NASDAQ:LYTS)
Enhancing commercial environments, LSI (NASDAQ:LYTS) provides lighting and display solutions for businesses and retailers.
LSI reported revenues of $132.5 million, up 22.5% year on year. This print exceeded analysts’ expectations by 2.1%. Despite the top-line beat, it was still a softer quarter for the company with a miss of analysts’ EPS and EBITDA estimates.
“Our Company delivered solid fiscal third quarter results, achieving sales growth of 22%, while successfully managing a period of significant variability in customer project schedules and demand levels,” stated James A. Clark, President, and Chief Executive Officer of LSI.
LSI Total Revenue
Interestingly, the stock is up 5.8% since reporting and currently trades at $16.70.
Founded in 1961, Kimball Electronics (NYSE:KE) is a global contract manufacturer specializing in electronics and manufacturing solutions for automotive, medical, and industrial markets.
Kimball Electronics reported revenues of $374.6 million, down 11.9% year on year, outperforming analysts’ expectations by 10.8%. The business had an exceptional quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Kimball Electronics Total Revenue
Kimball Electronics pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 30.8% since reporting. It currently trades at $19.26.
Credited with introducing the first automatic washing machine, Whirlpool (NYSE:WHR) is a manufacturer of a variety of home appliances.
Whirlpool reported revenues of $3.62 billion, down 19.4% year on year, falling short of analysts’ expectations by 1%. It was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations.
Whirlpool delivered the slowest revenue growth in the group. Interestingly, the stock is up 9.6% since the results and currently trades at $85.14.
One of the pioneers of smart lights, Acuity (NYSE:AYI) designs and manufactures light fixtures and building management systems used in various industries.
Acuity Brands reported revenues of $1.01 billion, up 11.1% year on year. This print lagged analysts' expectations by 2.2%. Overall, it was a softer quarter as it also logged a miss of analysts’ organic revenue estimates and a slight miss of analysts’ EBITDA estimates.
Acuity Brands had the weakest performance against analyst estimates among its peers. The stock is up 2.5% since reporting and currently trades at $273.50.
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 $1.37 billion, down 2.4% year on year. This number came in 1.3% below analysts' expectations. It was a slower quarter as it also recorded a significant miss of analysts’ EBITDA and EPS estimates.
The stock is up 6.1% since reporting and currently trades at $384.50.
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.
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