Electrical Systems Stocks Q2 Highlights: Hubbell (NYSE:HUBB)

Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Hubbell (NYSE:HUBB) and its peers.

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 mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was 2.1% below.

Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.

Thankfully, electrical systems stocks have been resilient with share prices up 5.8% on average since the latest earnings results.

Hubbell (NYSE:HUBB)

A respected player in the electrical segment, Hubbell (NYSE:HUBB) manufactures electronic products for the construction, industrial, utility, and telecommunications markets.

Hubbell reported revenues of $1.45 billion, up 6.3% year on year. This print fell short of analysts’ expectations by 2.1%. Overall, it was a slower quarter for the company with a miss of analysts’ organic revenue estimates.

“Hubbell delivered solid performance in the second quarter,” said Gerben Bakker, Chairman, President and CEO.

Interestingly, the stock is up 20.1% since reporting and currently trades at $441.11.

Is now the time to buy Hubbell? 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%. 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 89% since reporting. It currently trades at $252.

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 13.7% since the results and currently trades at $17.64.

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. This number surpassed analysts’ expectations by 2.9%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ Security revenue estimates and full-year revenue guidance exceeding analysts’ expectations.

OSI Systems delivered the highest full-year guidance raise among its peers. The stock is up 1.6% since reporting and currently trades at $146.89.

Read our full, actionable report on OSI Systems here, it’s free.

Vertiv (NYSE:VRT)

Formerly part of Emerson Electric, Vertiv (NYSE:VRT) manufactures and services infrastructure technology products for data centers and communication networks.

Vertiv reported revenues of $1.95 billion, up 12.6% year on year. This number met analysts’ expectations. It was a strong quarter as it also logged an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ earnings estimates.

The stock is up 17.3% since reporting and currently trades at $106.71.

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

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