Electrical Systems Stocks Q1 Recap: Benchmarking Benchmark Electronics (NYSE:BHE)

As the Q1 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the electrical systems industry, including Benchmark Electronics (NYSE:BHE) 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 16 electrical systems stocks we track reported a satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 2.5% while next quarter’s revenue guidance was in line.

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.

Luckily, electrical systems stocks have performed well with share prices up 10.9% on average since the latest earnings results.

Benchmark Electronics (NYSE:BHE)

Based in Tempe, Arizona, Benchmark Electronics (NYSE:BHE) is a global provider of product design, engineering services, technology solutions, and manufacturing services.

Benchmark Electronics reported revenues of $675.6 million, down 2.8% year on year. This print exceeded analysts’ expectations by 4.7%. Overall, it was an exceptional quarter for the company with a decent beat of analysts’ earnings estimates.

"Once again Benchmark delivered solid results, demonstrating consistent progress toward achieving our longer-term operational objectives," said Jeff Benck, Benchmark's President and CEO.

Interestingly, the stock is up 8.3% since reporting and currently trades at $44.06.

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

Best Q1: 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 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 111% since reporting. It currently trades at $281.59.

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

Weakest Q1: Methode Electronics (NYSE:MEI)

Founded in 1946, Methode Electronics (NYSE:MEI) is a global supplier of custom-engineered solutions for Original Equipment Manufacturers (OEMs).

Methode Electronics reported revenues of $258.5 million, down 10.8% year on year, falling short of analysts’ expectations by 3%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.

Interestingly, the stock is up 11.7% since the results and currently trades at $11.24.

Read our full analysis of Methode Electronics’s results here.

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 result was in line with analysts’ expectations. It was a very strong quarter as it also logged an impressive beat of analysts’ operating margin estimates and full-year revenue guidance exceeding analysts’ expectations.

Vertiv scored the highest full-year guidance raise among its peers. The stock is up 25.6% since reporting and currently trades at $114.30.

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

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 number lagged analysts' expectations by 2.1%. Overall, it was a slower quarter as it also recorded a miss of analysts’ organic revenue estimates.

The stock is up 23.5% since reporting and currently trades at $453.50.

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

Join Paid Stock Investor Research

Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.