Q2 Rundown: Allegion (NYSE:ALLE) Vs Other Electrical Systems Stocks
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 electrical systems stocks fared in Q2, starting with Allegion (NYSE:ALLE).
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 15 electrical systems stocks we track reported a slower Q2. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was 2.1% below.
Inflation progressed towards the Fed’s 2% goal at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation, and electrical systems stocks have had a rough stretch. On average, share prices are down 7.5% 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 $965.6 million, up 5.8% year on year. This print exceeded analysts’ expectations by 1.1%. Overall, it was a solid quarter for the company with a decent beat of analysts’ earnings estimates.
“Strong execution by the entire Allegion team drove record Q2 revenue and adjusted EPS,” said Allegion President and CEO John H. Stone.
Interestingly, the stock is up 5.8% since reporting and currently trades at $134.50.
Is now the time to buy Allegion? Access our full analysis of the earnings results here, it’s free.
Best Q2: Powell (NASDAQ:POWL)
Originally a metal-working shop supporting local petrochemical facilities, Powell (NYSE:POWL) has grown from a small Houston manufacturer to a global provider of electrical systems.
Powell reported revenues of $288.2 million, up 49.8% year on year, outperforming analysts’ expectations by 29.7%. It was an incredible quarter for the company with an impressive beat of analysts’ earnings estimates.
Powell delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 12.8% since reporting. It currently trades at $150.34.
Is now the time to buy Powell? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $430.2 million, down 13.3% year on year, falling short of analysts’ expectations by 3.6%. It was a weak quarter for the company with full-year revenue guidance missing analysts’ expectations and a miss of analysts’ earnings estimates.
Kimball Electronics posted the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 14.2% since the results and currently trades at $17.54.
Read our full analysis of Kimball Electronics’s results here.
OSI Systems (NASDAQ:OSIS)
With a name reflecting its initial focus on optical sensors, OSI Systems (NASDAQ:OSIS) is a designer and manufacturer of specialized electronic systems and components.
OSI Systems reported revenues of $480.9 million, up 16.8% year on year, surpassing analysts’ expectations by 2.9%. Overall, it was a very strong quarter for the company with full-year revenue guidance exceeding analysts’ expectations.
OSI Systems scored the highest full-year guidance raise among its peers. The stock is down 3.4% since reporting and currently trades at $139.76.
Read our full, actionable report on OSI Systems here, it’s free.
Atkore (NYSE:ATKR)
Protecting the things that power our world, Atkore (NYSE:ATKR) designs and manufactures electrical safety products.
Atkore reported revenues of $822.4 million, down 10.5% year on year, in line with analysts’ expectations. More broadly, it was a weak quarter for the company with underwhelming EBITDA guidance for the full year.
The stock is down 29.3% since reporting and currently trades at $83.77.
Read our full, actionable report on Atkore here, it’s free.
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