Douglas Dynamics (NYSE:PLOW): Strongest Q2 Results from the Heavy Transportation Equipment Group
Looking back on heavy transportation equipment stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Douglas Dynamics (NYSE:PLOW) and its peers.
Heavy transportation equipment companies are investing in automated vehicles that increase efficiencies and connected machinery that collects actionable data. Some are also developing electric vehicles and mobility solutions to address customers’ concerns about carbon emissions, creating new sales opportunities. Additionally, they are increasingly offering automated equipment that increases efficiencies and connected machinery that collects actionable data. On the other hand, heavy transportation equipment companies are at the whim of economic cycles. Interest rates, for example, can greatly impact the construction and transport volumes that drive demand for these companies’ offerings.
The 14 heavy transportation equipment stocks we track reported a strong Q2. As a group, revenues were in line with analysts’ consensus estimates.
After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.
Heavy Transportation Equipment stocks have held steady amidst all this with average share prices relatively unchanged since the latest earnings results.
Best Q2: Douglas Dynamics (NYSE:PLOW)
Once manufacturing snowplows designed for the iconic jeep vehicle precursor, Douglas Dynamics (NYSE:PLOW) offers snow and ice equipment for the roads and sidewalks.
Douglas Dynamics reported revenues of $199.9 million, down 3.6% year on year. This print exceeded analysts’ expectations by 9.4%. Overall, it was an incredible quarter for the company with an impressive beat of analysts’ earnings estimates.
Jim Janik, Chairman, Interim President and CEO, commented, “During the second quarter, we have seen profitability improve despite lower Net Sales impacted by low snowfall, due to the management of throughput, pricing realization, and the successful implementation of the 2024 Cost Savings Program. During the first half of the year, the team made difficult but important decisions regarding our cost structure to ensure we are well positioned to succeed. Moving forward, our Attachments segment remains resilient and focused on building for the future in the face of tough market conditions. Our Solutions segment continues to grow and explore exciting opportunities, with everyone on our world class team striving to maximize our near-term performance.”
Interestingly, the stock is up 4.1% since reporting and currently trades at $27.48.
Is now the time to buy Douglas Dynamics? Access our full analysis of the earnings results here, it’s free.
Allison Transmission (NYSE:ALSN)
Helping build race cars at one point, Allison Transmission (NYSE:ALSN) offers transmissions to original equipment manufacturers and fleet operators.
Allison Transmission reported revenues of $816 million, up 4.2% year on year, outperforming analysts’ expectations by 2.1%. The business had a very strong quarter with an impressive beat of analysts’ operating margin estimates and full-year revenue guidance exceeding analysts’ expectations.
The market seems happy with the results as the stock is up 18.9% since reporting. It currently trades at $100.35.
Is now the time to buy Allison Transmission? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Commercial Vehicle Group (NASDAQ:CVGI)
Formed from a partnership between two distinct companies, CVG (NASDAQ:CVGI) offers various components used in vehicles and systems used in warehouses.
Commercial Vehicle Group reported revenues of $229.9 million, down 12.3% year on year, falling short of analysts’ expectations by 3.3%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.
As expected, the stock is down 34% since the results and currently trades at $3.12.
Read our full analysis of Commercial Vehicle Group’s results here.
Wabtec (NYSE:WAB)
Also known as Wabtec, Westinghouse Air Brake Technologies (NYSE:WAB) provides equipment, systems, and its related software for the railway industry.
Wabtec reported revenues of $2.64 billion, up 9.8% year on year. This result met analysts’ expectations. It was a strong quarter as it also produced full-year revenue guidance exceeding analysts’ expectations and a decent beat of analysts’ operating margin estimates.
Wabtec delivered the highest full-year guidance raise among its peers. The stock is up 13% since reporting and currently trades at $190.03.
Read our full, actionable report on Wabtec here, it’s free.
Trinity (NYSE:TRN)
Trinity Industries, Inc. (NYSE: TRN) is a provider of railcar products and services in North America, operating under the trade name TrinityRail.
Trinity reported revenues of $841.4 million, up 16.5% year on year. This result surpassed analysts’ expectations by 14%. It was a very strong quarter as it also put up an impressive beat of analysts’ earnings estimates.
Trinity pulled off the biggest analyst estimates beat among its peers. The stock is up 9.4% since reporting and currently trades at $36.13.
Read our full, actionable report on Trinity here, it’s free.
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