The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how professional tools and equipment stocks fared in Q1, starting with Fortive (NYSE: FTV).
Automation that increases efficiency and connected equipment that collects analyzable data have been trending, creating new demand. Some professional tools and equipment companies also provide software to accompany measurement or automated machinery, adding a stream of recurring revenues to their businesses. On the other hand, professional tools and equipment 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 10 professional tools and equipment stocks we track reported a mixed Q1. As a group, revenues missed analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was 1.1% above.
In light of this news, share prices of the companies have held steady as they are up 3.7% on average since the latest earnings results.
Fortive (NYSE: FTV)
Taking its name from the Latin root of "strong", Fortive (NYSE: FTV) manufactures products and develops industrial software for numerous industries.
Fortive reported revenues of $1.47 billion, down 3.3% year on year. This print fell short of analysts’ expectations by 1.4%. Overall, it was a mixed quarter for the company with a solid beat of analysts’ adjusted operating income estimates but EPS guidance for next quarter missing analysts’ expectations.
James A. Lico, President and Chief Executive Officer, stated, “Our first quarter results reflect our continued ability to adapt and respond to the current dynamic macroeconomic environment. We delivered core growth in our Intelligent Operating Solutions and Advanced Healthcare Solutions segments, supported by solid demand for our industry-leading portfolio of safety and productivity solutions. Our Precision Technologies segment saw customers in test and measurement delay investments in light of increased geopolitical and macroeconomic uncertainty, while strong demand continued for utility monitoring and defense & space solutions. Rigorous operational execution contributed to continued margin expansion and strong free cash flow generation in the quarter.”
The stock is up 1.3% since reporting and currently trades at $70.50.
Is now the time to buy Fortive? Access our full analysis of the earnings results here, it’s free.
Best Q1: ESAB (NYSE: ESAB)
Having played a significant role in the construction of the iconic Sydney Opera House, ESAB (NYSE: ESAB) manufactures and sells welding and cutting equipment for numerous industries.
ESAB reported revenues of $678.1 million, down 1.7% year on year, outperforming analysts’ expectations by 2.2%. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates.
The market seems content with the results as the stock is up 3% since reporting. It currently trades at $123.74.
Is now the time to buy ESAB? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Snap-on (NYSE: SNA)
Founded in 1920, Snap-on (NYSE: SNA) is a global provider of tools, equipment, and diagnostics for various industries such as vehicle repair, aerospace, and the military.
Snap-on reported revenues of $1.24 billion, down 3% year on year, falling short of analysts’ expectations by 4.1%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
Snap-on delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 5.9% since the results and currently trades at $312.34.
Read our full analysis of Snap-on’s results here.
Hillman (NASDAQ: HLMN)
Established when Max Hillman purchased a franchise operation, Hillman (NASDAQ: HLMN) designs, manufactures, and sells industrial equipment and systems for various sectors.
Hillman reported revenues of $359.3 million, up 2.6% year on year. This number lagged analysts' expectations by 0.5%. Zooming out, it was actually a strong quarter as it logged a solid beat of analysts’ adjusted operating income estimates and full-year EBITDA guidance slightly topping analysts’ expectations.
Hillman had the weakest full-year guidance update among its peers. The stock is down 9.3% since reporting and currently trades at $6.86.
Read our full, actionable report on Hillman here, it’s free.
Kennametal (NYSE: KMT)
Involved in manufacturing hard tips of anti-tank projectiles in World War II, Kennametal (NYSE: KMT) is a provider of industrial materials and tools for various sectors.
Kennametal reported revenues of $486.4 million, down 5.7% 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’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Kennametal achieved the highest full-year guidance raise among its peers. The stock is up 12.3% since reporting and currently trades at $22.25.
Read our full, actionable report on Kennametal here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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