The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how professional tools and equipment stocks fared in Q3, starting with ESAB (NYSE:ESAB).
Automation that increases efficiency and connected equipment that collects analyzable data have been trending, creating new demand. Some professional tools and equipment companies also provide software to accompany measurement or automated machinery, adding a stream of recurring revenues to their businesses. On the other hand, professional tools and equipment 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 9 professional tools and equipment stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was 0.8% below.
In light of this news, share prices of the companies have held steady as they are up 4.9% on average since the latest earnings results.
Best Q3: ESAB (NYSE:ESAB)
Having played a significant role in the construction of the iconic Sydney Opera House, ESAB (NYSE:ESAB) manufactures and sells welding and cutting equipment for numerous industries.
ESAB reported revenues of $673.3 million, down 1.1% year on year. This print exceeded analysts’ expectations by 8.9%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts’ EBITDA estimates.
“ESAB delivered another strong quarter, marked by positive volume growth, record margin, and robust cash flow, amid a challenging end market environment,” said Shyam P. Kambeyanda, President and CEO of ESAB.
ESAB pulled off the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 16.4% since reporting and currently trades at $129.68.
Is now the time to buy ESAB? Access our full analysis of the earnings results here, it’s free.
Snap-on (NYSE:SNA)
Founded in 1920, Snap-on (NYSE:SNA) is a global provider of tools, equipment, and diagnostics for various industries such as vehicle repair, aerospace, and the military.
Snap-on reported revenues of $1.25 billion, flat year on year, outperforming analysts’ expectations by 7.8%. The business had a very strong quarter with a solid beat of analysts’ organic revenue estimates and a decent beat of analysts’ EPS estimates.
The market seems happy with the results as the stock is up 22.5% since reporting. It currently trades at $365.10.
Is now the time to buy Snap-on? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Hyster-Yale Materials Handling (NYSE:HY)
Playing a significant role in the development of the hydraulic lift truck, Hyster-Yale (NYSE:HY) designs, manufactures, and sells materials handling equipment to various sectors.
Hyster-Yale Materials Handling reported revenues of $1.02 billion, up 1.5% year on year, falling short of analysts’ expectations by 3.8%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
As expected, the stock is down 10.2% since the results and currently trades at $56.31.
Read our full analysis of Hyster-Yale Materials Handling’s results here.
Hillman (NASDAQ:HLMN)
Established when Max Hillman purchased a franchise operation, Hillman (NASDAQ:HLMN) designs, manufactures, and sells industrial equipment and systems for various sectors.
Hillman reported revenues of $393.3 million, down 1.4% year on year. This print topped analysts’ expectations by 1%. It was a strong quarter as it also logged an impressive beat of analysts’ adjusted operating income estimates and full-year EBITDA guidance beating analysts’ expectations.
The stock is up 6.1% since reporting and currently trades at $11.39.
Read our full, actionable report on Hillman here, it’s free.
Lincoln Electric (NASDAQ:LECO)
Headquartered in Ohio, Lincoln Electric (NASDAQ:LECO) manufactures and sells welding equipment for various industries.
Lincoln Electric reported revenues of $983.8 million, down 4.8% year on year. This print met analysts’ expectations. Aside from that, it was a mixed quarter as it also logged a solid beat of analysts’ adjusted operating income estimates but a significant miss of analysts’ organic revenue estimates.
The stock is up 8.3% since reporting and currently trades at $213.84.
Read our full, actionable report on Lincoln Electric here, it’s free.
Market Update
As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the US Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain. Said differently, there's still much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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