Wrapping up Q3 earnings, we look at the numbers and key takeaways for the professional tools and equipment stocks, including ESAB NYSE:ESAB and its peers.
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 9 professional tools and equipment stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.1% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.7% since the latest earnings results.
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 $727.8 million, up 8.1% year on year. This print exceeded analysts’ expectations by 4.6%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ revenue and EBITDA estimates.
“ESAB delivered a strong quarter on robust execution, with growth in our Equipment and Automation portfolio and from recent acquisitions. Our U.S. business returned to mid-single-digit growth as tariff uncertainties abated, and our EMEA and APAC businesses continued to see strong demand from high-growth markets,” said Shyam P. Kambeyanda, ESAB President and CEO.
ESAB achieved the biggest analyst estimates beat and fastest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 13.3% since reporting and currently trades at $104.93.
Best Q3: 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 $498 million, up 3.3% year on year, outperforming analysts’ expectations by 4.3%. The business had an incredible quarter with an impressive beat of analysts’ organic revenue estimates and EPS guidance for next quarter exceeding analysts’ expectations.
Kennametal achieved the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 15.1% since reporting. It currently trades at $25.45.
Slowest Q3: Stanley Black & Decker NYSE:SWK
With an iconic “STANLEY” logo which has remained virtually unchanged for over a century, Stanley Black & Decker NYSE:SWK is a manufacturer primarily catering to the tool and outdoor equipment industry.
Stanley Black & Decker reported revenues of $3.76 billion, flat year on year, in line with analysts’ expectations. It was a mixed quarter as it posted a beat of analysts’ EPS estimates but full-year EPS guidance slightly missing analysts’ expectations.
Stanley Black & Decker delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 5.2% since the results and currently trades at $62.93.
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 $1.03 billion, up 2.3% year on year. This result topped analysts’ expectations by 1.8%. Overall, it was a stunning quarter as it also produced a solid beat of analysts’ EBITDA estimates.
The stock is up 2.6% since reporting and currently trades at $50.43.
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 $1.29 billion, up 3.6% year on year. This number beat analysts’ expectations by 2.7%. Taking a step back, it was a satisfactory quarter as it also produced a solid beat of analysts’ adjusted operating income estimates but a miss of analysts’ EBITDA estimates.
The stock is flat since reporting and currently trades at $329.83.