Q2 Rundown: Sanmina (NASDAQ:SANM) Vs Other Electrical Systems Stocks
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Sanmina (NASDAQ:SANM) and the rest of the electrical systems stocks fared in Q2.
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.
Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. This year has been a different story as mixed inflation signals have led to market volatility, and electrical systems stocks have had a rough stretch. On average, share prices are down 6% since the latest earnings results.
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 $1.84 billion, down 16.6% year on year. This print fell short of analysts’ expectations by 1.1%. Overall, it was a disappointing quarter for the company with a miss of analysts’ earnings estimates and revenue guidance for next quarter missing analysts’ expectations.
"We delivered third quarter results in line with our outlook. We are starting to see stabilization and demand improve going into our fourth quarter, and we expect to see growth in fiscal 2025," stated Jure Sola, Chairman and Chief Executive Officer.
Unsurprisingly, the stock is down 14.2% since reporting and currently trades at $64.83.
Read our full report on Sanmina 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%. The business had an incredible quarter with an impressive beat of analysts’ earnings estimates.
Powell achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 16% since reporting. It currently trades at $154.70.
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 disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations and a miss of analysts’ earnings estimates.
Kimball Electronics delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 16.7% since the results and currently trades at $17.03.
Read our full analysis of Kimball Electronics’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 $822.4 million, down 10.5% year on year. This result was in line with analysts’ expectations. More broadly, it was a disappointing quarter as it recorded underwhelming EBITDA guidance for the full year and a miss of analysts’ operating margin estimates.
The stock is down 29.4% since reporting and currently trades at $83.60.
Read our full, actionable report on Atkore here, it’s free.
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. This print surpassed analysts’ expectations by 2.9%. It was a very strong quarter as it also provided full-year revenue guidance exceeding analysts’ expectations.
OSI Systems pulled off the highest full-year guidance raise among its peers. The stock is down 4% since reporting and currently trades at $138.81.
Read our full, actionable report on OSI Systems here, it’s free.
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