A Look Back at Engineered Components and Systems Stocks’ Q2 Earnings: Park-Ohio (NASDAQ:PKOH) Vs The Rest Of The Pack

Wrapping up Q2 earnings, we look at the numbers and key takeaways for the engineered components and systems stocks, including Park-Ohio (NASDAQ:PKOH) and its peers.

Engineered components and systems companies possess technical know-how in sometimes narrow areas such as metal forming or intelligent robotics. Lately, automation and connected equipment collecting analyzable data have been trending, creating new demand. On the other hand, like the broader industrials sector, engineered components and systems 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 13 engineered components and systems stocks we track reported a satisfactory Q2. As a group, revenues missed analysts’ consensus estimates by 1.2% while next quarter’s revenue guidance was 0.9% below.

The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.

Thankfully, engineered components and systems stocks have been resilient with share prices up 9.8% on average since the latest earnings results.

Park-Ohio (NASDAQ:PKOH)

Based in Cleveland, Park-Ohio (NASDAQ:PKOH) provides supply chain management services, capital equipment, and manufactured components.

Park-Ohio reported revenues of $432.6 million, up 1.1% year on year. This print fell short of analysts’ expectations by 2.9%. Overall, it was a slower quarter for the company with some shareholders anticipating a better outcome.

“We are proud to have delivered record revenue results and improved profitability during the second quarter. We achieved these results against a stable but mixed revenue backdrop, with particular strength coming from our aerospace and defense market as well as benefiting from significant backlogs in some of our long cycle businesses. While we expect mixed demand in global industrial markets to continue, our diversification and improved cost structure will help us achieve year-over-year revenue growth with improved profitability and free cash flow through the business cycle," said Matthew V. Crawford, Chairman and Chief Executive Officer.

Interestingly, the stock is up 14.7% since reporting and currently trades at $30.11.

Read our full report on Park-Ohio here, it’s free.

Best Q2: Mayville Engineering (NYSE:MEC)

Originally founded solely on tool and die manufacturing, Mayville Engineering Company (NYSE:MEC) specializes in metal fabrication, tube bending, and welding to be used in various industries.

Mayville Engineering reported revenues of $163.6 million, up 17.7% year on year, outperforming analysts’ expectations by 2.8%. The business had a stunning quarter with an impressive beat of analysts’ operating margin estimates.

Mayville Engineering pulled off the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 23.7% since reporting. It currently trades at $20.74.

Is now the time to buy Mayville Engineering? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Worthington (NYSE:WOR)

Founded by a steel salesman, Worthington (NYSE:WOR) specializes in steel processing, pressure cylinders, and engineered cabs for commercial markets.

Worthington reported revenues of $257.3 million, down 17.5% year on year, falling short of analysts’ expectations by 13.1%. It was a disappointing quarter as it posted a miss of analysts’ Building Products revenue and operating margin estimates.

Worthington delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 7.6% since the results and currently trades at $41.81.

Read our full analysis of Worthington’s results here.

Gates Industrial Corporation (NYSE:GTES)

Helping create one of the most memorable moments for the iconic “Jurassic Park” film, Gates (NYSE:GTES) offers power transmission and fluid transfer equipment for various industries.

Gates Industrial Corporation reported revenues of $898.6 million, down 4% year on year. This print was in line with analysts’ expectations. More broadly, it was a slower quarter as it produced underwhelming earnings guidance for the full year and a miss of analysts’ operating margin estimates.

The stock is up 5.4% since reporting and currently trades at $18.67.

Read our full, actionable report on Gates Industrial Corporation here, it’s free.

Arrow Electronics (NYSE:ARW)

Founded as a single retail store, Arrow Electronics (NYSE:ARW) provides electronic components and enterprise computing solutions to businesses globally.

Arrow Electronics reported revenues of $6.89 billion, down 19% year on year. This print beat analysts’ expectations by 5.7%. Overall, it was an exceptional quarter as it also produced an impressive beat of analysts’ earnings estimates.

Arrow Electronics pulled off the biggest analyst estimates beat but had the slowest revenue growth among its peers. The stock is up 9.6% since reporting and currently trades at $135.55.

Read our full, actionable report on Arrow Electronics here, it’s free.

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