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 Q1, starting with Nordson (NASDAQ:NDSN).
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 mixed Q1. As a group, revenues missed analysts’ consensus estimates by 3.2% while next quarter’s revenue guidance was 1.1% above.
Thankfully, share prices of the companies have been resilient as they are up 6.1% on average since the latest earnings results.
Nordson (NASDAQ:NDSN)
Founded in 1954, Nordson Corporation (NASDAQ:NDSN) manufactures dispensing equipment and industrial adhesives, sealants and coatings.
Nordson reported revenues of $682.9 million, up 5% year on year. This print exceeded analysts’ expectations by 1.1%. Overall, it was a satisfactory quarter for the company with EPS guidance for next quarter topping analysts’ expectations but organic revenue in line with analysts’ estimates.
Commenting on the Company’s fiscal 2025 second quarter results, Nordson President and Chief Executive Officer Sundaram Nagarajan said, “We started the second quarter with increasing momentum in order entry, and our results outperformed the mid-point of our sales and earnings guidance. This was driven by strength in our electronics systems sales and steady growth in nonwovens systems, precision agriculture and medical fluid components. Also, our Atrion acquisition continues to perform above expectations. As expected, this growth was partially offset by year-over-year weakness in industrial systems sales, which improved sequentially compared to the first quarter. Operational excellence drove strong profit performance of 32% EBITDA despite the uncertain geopolitical environment. We also maintained our sound balance sheet and bought back $85 million in shares during this dynamic quarter.”
Nordson scored the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 9.5% since reporting and currently trades at $214.30.
Is now the time to buy Nordson? Access our full analysis of the earnings results here, it’s free.
Best Q1: 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 $678.1 million, down 1.7% year on year, outperforming analysts’ expectations by 2.2%. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.
The market seems happy with the results as the stock is up 6.6% since reporting. It currently trades at $128.04.
Is now the time to buy ESAB? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $910.4 million, down 13.8% year on year, falling short of analysts’ expectations by 3.9%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA estimates and a miss of analysts’ EPS estimates.
Hyster-Yale Materials Handling delivered the slowest revenue growth in the group. Interestingly, the stock is up 2.3% since the results and currently trades at $41.45.
Read our full analysis of Hyster-Yale Materials Handling’s results here.
Stanley Black & Decker (NYSE:SWK)
With an iconic “STANLEY” logo which has remained virtually unchanged for over a century, Stanley Black & Decker (NYSE:SWK) is a manufacturer primarily catering to the tool and outdoor equipment industry.
Stanley Black & Decker reported revenues of $3.74 billion, down 3.2% year on year. This number topped analysts’ expectations by 1.7%. Aside from that, it was a satisfactory quarter as it also produced a solid beat of analysts’ EPS estimates but a miss of analysts’ adjusted operating income estimates.
The stock is up 13.4% since reporting and currently trades at $69.36.
Read our full, actionable report on Stanley Black & Decker here, it’s free.
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 $486.4 million, down 5.7% year on year. This print was in line with analysts’ expectations. It was a very strong quarter as it also produced a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Kennametal scored the highest full-year guidance raise among its peers. The stock is up 23.7% since reporting and currently trades at $24.51.
Read our full, actionable report on Kennametal here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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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