As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the professional tools and equipment industry, including Snap-on (NYSE:SNA) and its peers.
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 10 professional tools and equipment stocks we track reported a slower Q3. As a group, revenues beat analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was 3% below.
While some professional tools and equipment stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.5% since the latest earnings results.
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. This print exceeded analysts’ expectations by 7.8%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ organic revenue estimates and a decent beat of analysts’ EPS estimates.
“We’re encouraged by our third quarter 2024 results as our businesses remained strong, yielding a balanced outcome and delivering profitability gains in these challenging times,” said Nick Pinchuk, Snap-on chairman and chief executive officer.
Interestingly, the stock is up 16.5% since reporting and currently trades at $347.21.
Is now the time to buy Snap-on? Access our full analysis of the earnings results here, it’s free.
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, outperforming analysts’ expectations by 8.9%. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates.
ESAB delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 11.1% since reporting. It currently trades at $123.78.
Is now the time to buy ESAB? 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 14.3% since the results and currently trades at $53.70.
Read our full analysis of Hyster-Yale Materials Handling’s results here.
Kennametal (NYSE:KMT)
Involved in manufacturing hard tips of anti-tank projectiles in World War II, Kennametal (NYSE:KMT) is a provider of industrial materials and tools for various sectors.
Kennametal reported revenues of $481.9 million, down 2.1% year on year. This result missed analysts’ expectations by 0.6%. Taking a step back, it was a mixed quarter as it also produced full-year EPS guidance exceeding analysts’ expectations but a significant miss of analysts’ adjusted operating income estimates.
Kennametal delivered the highest full-year guidance raise among its peers. The stock is down 9.7% since reporting and currently trades at $24.
Read our full, actionable report on Kennametal here, it’s free.
Fortive (NYSE:FTV)
Taking its name from the Latin root of "strong", Fortive (NYSE:FTV) manufactures products and develops industrial software for numerous industries.
Fortive reported revenues of $1.53 billion, up 2.7% year on year. This print came in 1.2% below analysts' expectations. Zooming out, it was a mixed quarter as it also recorded an impressive beat of analysts’ adjusted operating income estimates but a miss of analysts’ organic revenue estimates.
The stock is up 7.5% since reporting and currently trades at $80.21.
Read our full, actionable report on Fortive here, it’s free.
Market Update
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% 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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