Wrapping up Q1 earnings, we look at the numbers and key takeaways for the engineered components and systems stocks, including Timken (NYSE: TKR) 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 12 engineered components and systems stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 1.2% while next quarter’s revenue guidance was 1.1% below.

Luckily, engineered components and systems stocks have performed well with share prices up 11.5% on average since the latest earnings results.

Timken (NYSE: TKR)

Established after the founder noticed the difficulty freight wagons had making sharp turns, Timken (NYSE: TKR) is a provider of industrial parts used across various sectors.

Timken reported revenues of $1.14 billion, down 4.2% year on year. This print exceeded analysts’ expectations by 1.1%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ adjusted operating income estimates and full-year EPS guidance missing analysts’ expectations.

"Timken posted solid first-quarter results in a time of heightened uncertainty," said Richard G. Kyle, president and chief executive officer.

The stock is up 6.8% since reporting and currently trades at $69.70.

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

Best Q1: Regal Rexnord (NYSE: RRX)

Headquartered in Milwaukee, Regal Rexnord (NYSE: RRX) provides power transmission and industrial automation products.

Regal Rexnord reported revenues of $1.42 billion, down 8.4% year on year, outperforming analysts’ expectations by 3%. The business had a stunning quarter with a solid beat of analysts’ organic revenue and EBITDA estimates.

The market seems happy with the results as the stock is up 24.7% since reporting. It currently trades at $137.35.

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

Weakest Q1: 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 $405.4 million, down 2.9% year on year, falling short of analysts’ expectations by 4.7%. It was a softer quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.

Park-Ohio delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 15.4% since the results and currently trades at $18.05.

Read our full analysis of Park-Ohio’s results here.

ESCO (NYSE: ESE)

A developer of the communication systems used in the Batmobile of “The Dark Knight,” ESCO (NYSE: ESE) is a provider of engineered components for the aerospace, defense, and utility sectors.

ESCO reported revenues of $265.5 million, up 6.6% year on year. This print met analysts’ expectations. It was a very strong quarter as it also produced full-year EPS guidance exceeding analysts’ expectations.

ESCO pulled off the fastest revenue growth and highest full-year guidance raise among its peers. The stock is up 10.8% since reporting and currently trades at $181.17.

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

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 $135.6 million, down 15.9% year on year. This number topped analysts’ expectations by 0.8%. Overall, it was an exceptional quarter as it also logged a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.

Mayville Engineering had the slowest revenue growth among its peers. The stock is up 20.3% since reporting and currently trades at $15.93.

Read our full, actionable report on Mayville Engineering 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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