As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the electrical systems industry, including Thermon (NYSE:THR) and its peers.
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 12 electrical systems stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was 2.9% below.
Thankfully, share prices of the companies have been resilient as they are up 5.7% on average since the latest earnings results.
Thermon (NYSE:THR)
Creating the first packaged tracing systems, Thermon (NYSE:THR) is a leading provider of engineered industrial process heating solutions for process industries.
Thermon reported revenues of $134.1 million, up 5% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with full-year revenue guidance missing analysts’ expectations.
Thermon delivered the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 8.9% since reporting and currently trades at $26.48.
Is now the time to buy Thermon? Access our full analysis of the earnings results here, it’s free.
Best Q1: Kimball Electronics (NASDAQ:KE)
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 a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Kimball Electronics achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 16.9% since reporting. It currently trades at $17.22.
Is now the time to buy Kimball Electronics? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Whirlpool (NYSE:WHR)
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. The stock is flat since the results and currently trades at $77.
Read our full analysis of Whirlpool’s results here.
Hubbell (NYSE:HUBB)
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 result lagged analysts' expectations by 1.3%. Overall, it was a slower quarter as it also recorded a significant miss of analysts’ EBITDA and EPS estimates.
The stock is up 7.6% since reporting and currently trades at $390.
Read our full, actionable report on Hubbell here, it’s free.
Sanmina (NASDAQ:SANM)
Founded in 1980, Sanmina (NASDAQ:SANM) is an electronics manufacturing services company offering end-to-end solutions for various industries.
Sanmina reported revenues of $1.98 billion, up 8.1% year on year. This print beat analysts’ expectations by 1%. Zooming out, it was a slower quarter as it recorded revenue guidance for next quarter missing analysts’ expectations and a significant miss of analysts’ EBITDA estimates.
The stock is flat since reporting and currently trades at $80.23.
Read our full, actionable report on Sanmina here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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