As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the professional tools and equipment industry, including Lincoln Electric (NASDAQ:LECO) 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 slower Q1. As a group, revenues missed analysts’ consensus estimates by 0.8%.
Thankfully, share prices of the companies have been resilient as they are up 7.8% on average since the latest earnings results.
Lincoln Electric (NASDAQ:LECO)
Headquartered in Ohio, Lincoln Electric (NASDAQ:LECO) manufactures and sells welding equipment for various industries.
Lincoln Electric reported revenues of $1.00 billion, up 2.4% year on year. This print exceeded analysts’ expectations by 2.9%. Despite the top-line beat, it was still a mixed quarter for the company with a narrow beat of analysts’ organic revenue estimates but a miss of analysts’ EPS estimates.
“We continued to execute well in the quarter with solid core operating results,” said Steven B. Hedlund, Chair, President and Chief Executive Officer.
Lincoln Electric pulled off the biggest analyst estimates beat of the whole group. The stock is up 9.5% since reporting and currently trades at $201.45.
Read our full report on Lincoln Electric 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 happy with the results as the stock is up 8% since reporting. It currently trades at $129.74.
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. The stock is flat since the results and currently trades at $331.92.
Read our full analysis of Snap-on’s results here.
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 number was in line with analysts’ expectations. Overall, it was a very strong quarter as it also produced an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Kennametal delivered the highest full-year guidance raise among its peers. The stock is up 10.3% since reporting and currently trades at $21.86.
Read our full, actionable report on Kennametal here, it’s free.
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 result came in 0.5% below analysts' expectations. Taking a step back, it was still a strong quarter as it recorded a solid beat of analysts’ adjusted operating income estimates.
Hillman scored the fastest revenue growth but had the weakest full-year guidance update among its peers. The stock is up 5.8% since reporting and currently trades at $8.
Read our full, actionable report on Hillman here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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