Q3 Earnings Roundup: Hudson Technologies (NASDAQ:HDSN) And The Rest Of The Specialty Equipment Distributors Segment
Let’s dig into the relative performance of Hudson Technologies (NASDAQ:HDSN) and its peers as we unravel the now-completed Q3 specialty equipment distributors earnings season.
Historically, specialty equipment distributors have boasted deep selection and expertise in sometimes narrow areas like single-use packaging or unique lighting equipment. Additionally, the industry has evolved to include more automated industrial equipment and machinery over the last decade, driving efficiencies and enabling valuable data collection. Specialty equipment distributors whose offerings keep up with these trends can take share in a still-fragmented market, but like the broader industrials sector, this space is at the whim of economic cycles that impact the capital spending and manufacturing propelling industry volumes.
The 10 specialty equipment distributors stocks we track reported a slower Q3. As a group, revenues were in line with analysts’ consensus estimates.
While some specialty equipment distributors stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 3.7% since the latest earnings results.
Hudson Technologies (NASDAQ:HDSN)
Founded in 1991, Hudson Technologies (NASDAQ:HDSN) specializes in refrigerant services and solutions, providing refrigerant sales, reclamation, and recycling.
Hudson Technologies reported revenues of $61.94 million, down 19% year on year. This print fell short of analysts’ expectations by 6.3%. Overall, it was a slower quarter for the company with some shareholders anticipating a better outcome.
Brian F. Coleman, President and Chief Executive Officer of Hudson Technologies commented, “Our third quarter results reflected continued pricing pressure that persisted for certain refrigerants throughout the 2024 cooling season. While disappointing in the near term, pricing trends are only one element of our business model and we remain confident in our long-term growth strategy to capitalize on the phasedown of HFC refrigerants and the expected corresponding growth in demand for reclaimed refrigerants. With our current visibility, we are adjusting our expectation for full year 2024 revenue, which we anticipate will be at the low end of the guidance range we previously provided, with full year gross margin of approximately 28%.
Hudson Technologies Total Revenue
Hudson Technologies delivered the slowest revenue growth of the whole group. Unsurprisingly, the stock is down 28.5% since reporting and currently trades at $5.43.
Founded in 1947, Richardson Electronics (NASDAQ:RELL) is a distributor of power grid and microwave tubes as well as consumables related to those products.
Richardson Electronics reported revenues of $53.73 million, up 2.2% year on year, outperforming analysts’ expectations by 8.7%. The business had an incredible quarter with an impressive beat of analysts’ EPS and EBITDA estimates.
Richardson Electronics Total Revenue
Richardson Electronics achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 6.4% since reporting. It currently trades at $13.71.
Founded in 1984, Alta Equipment Group (NYSE:ALTG) is a provider of industrial and construction equipment and services across the Midwest and Northeast United States.
Alta reported revenues of $448.8 million, down 3.7% year on year, falling short of analysts’ expectations by 6.5%. It was a disappointing quarter as it posted and a significant miss of analysts’ adjusted operating income estimates.
Alta 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 $6.70.
Formerly a subsidiary of Hertz Corporation and with a logo that still bears some similarities to its former parent, Herc Holdings (NYSE:HRI) provides equipment rental and related services to a wide range of industries.
Herc reported revenues of $965 million, up 6.3% year on year. This print topped analysts’ expectations by 3.6%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ Equipment rentals revenue estimates and full-year EBITDA guidance slightly topping analysts’ expectations.
The stock is up 14.1% since reporting and currently trades at $192.99.
Founded in 1980, Titan Machinery (NASDAQ:TITN) is a distributor of agricultural and construction equipment across the United States and Europe.
Titan Machinery reported revenues of $679.8 million, down 2.1% year on year. This result surpassed analysts’ expectations by 0.7%. It was a strong quarter as it also logged a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ EPS estimates.
The stock is down 10.6% since reporting and currently trades at $13.78.
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 has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), 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 the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
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