Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at RBC Bearings (NYSE:RBC) and the best and worst performers in the engineered components and systems industry.
Engineered components and systems companies possess technical know-how in sometimes narrow areas such as metal forming or intelligent robotics. Lately, automation and connected equipment collecting analyzable data have been trending, creating new demand. On the other hand, like the broader industrials sector, engineered components and systems companies are at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies’ offerings.
The 13 engineered components and systems stocks we track reported a satisfactory Q4. As a group, revenues along with next quarter’s revenue guidance 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 10.5% since the latest earnings results.
RBC Bearings (NYSE:RBC)
With a Guinness World Record for engineering the largest spherical plain bearing, RBC Bearings (NYSE:RBC) is a manufacturer of bearings and related components for the aerospace & defense, industrial, and transportation industries.
RBC Bearings reported revenues of $394.4 million, up 5.5% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a significant miss of analysts’ EPS estimates and a miss of analysts’ EBITDA estimates.
“RBC delivered another quarter of strong operational performance with A&D segment sales up 10.7% year over year and Industrial segment sales up 2.7%,” said Dr. Michael J. Hartnett, Chairman and Chief Executive Officer.
RBC Bearings Total Revenue
Interestingly, the stock is up 2.7% since reporting and currently trades at $330.88.
A developer of the communication systems used in the Batmobile of “The Dark Knight,” ESCO (NYSE:ESE) is a provider of engineered components for the aerospace, defense, and utility sectors.
ESCO reported revenues of $247 million, up 13.2% year on year, outperforming analysts’ expectations by 2.8%. The business had a stunning quarter with EPS guidance for the next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EPS estimates.
ESCO Total Revenue
ESCO delivered the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 20.1% since reporting. It currently trades at $158.92.
Headquartered in Milwaukee, Regal Rexnord (NYSE:RRX) provides power transmission and industrial automation products.
Regal Rexnord reported revenues of $1.46 billion, down 9.1% year on year, falling short of analysts’ expectations by 1.9%. It was a disappointing quarter as it posted full-year EPS guidance missing analysts’ expectations.
As expected, the stock is down 31.7% since the results and currently trades at $105.81.
Founded by a steel salesman, Worthington (NYSE:WOR) specializes in steel processing, pressure cylinders, and engineered cabs for commercial markets.
Worthington reported revenues of $304.5 million, down 3.9% year on year. This result surpassed analysts’ expectations by 6.7%. Overall, it was a very strong quarter as it also produced an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.
Worthington scored the biggest analyst estimates beat among its peers. The stock is up 18.3% since reporting and currently trades at $49.23.
Founded when its founder patented a unique design for a vacuum system used in the sugar refining process, Graham (NYSE:GHM) provides vacuum and heat transfer equipment for the energy, petrochemical, refining, and chemical sectors.
Graham Corporation reported revenues of $47.04 million, up 7.3% year on year. This number lagged analysts' expectations by 5%. Zooming out, it was a mixed quarter as it also logged a solid beat of analysts’ EPS estimates but full-year revenue guidance slightly missing analysts’ expectations.
Graham Corporation had the weakest performance against analyst estimates and weakest full-year guidance update among its peers. The stock is down 31.9% since reporting and currently trades at $32.09.
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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