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 Allegion (NYSE:ALLE) and the best and worst performers in the electrical systems industry.
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 11 electrical systems stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 1.7% while next quarter’s revenue guidance was 2.9% below.
Thankfully, share prices of the companies have been resilient as they are up 10% on average since the latest earnings results.
Allegion (NYSE:ALLE)
Allegion plc (NYSE:ALLE) is a provider of security products and solutions that keep people and assets safe and secure in various environments.
Allegion reported revenues of $941.9 million, up 5.4% year on year. This print exceeded analysts’ expectations by 2%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ adjusted operating income estimates.
Interestingly, the stock is up 12.9% since reporting and currently trades at $142.91.
Is now the time to buy Allegion? 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 scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 20.8% since reporting. It currently trades at $17.80.
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. Interestingly, the stock is up 8.8% since the results and currently trades at $84.48.
Read our full analysis of Whirlpool’s results here.
Atkore (NYSE:ATKR)
Protecting the things that power our world, Atkore (NYSE:ATKR) designs and manufactures electrical safety products.
Atkore reported revenues of $701.7 million, down 11.5% year on year. This result beat analysts’ expectations by 0.6%. Overall, it was a very strong quarter as it also logged a solid beat of analysts’ EBITDA estimates.
The stock is up 3.8% since reporting and currently trades at $69.43.
Read our full, actionable report on Atkore here, it’s free.
LSI (NASDAQ:LYTS)
Enhancing commercial environments, LSI (NASDAQ:LYTS) provides lighting and display solutions for businesses and retailers.
LSI reported revenues of $132.5 million, up 22.5% year on year. This print topped analysts’ expectations by 2.1%. However, it was a softer quarter as it recorded a miss of analysts’ EPS and EBITDA estimates.
The stock is up 3.5% since reporting and currently trades at $16.33.
Read our full, actionable report on LSI 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 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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