Wrapping up Q2 earnings, we look at the numbers and key takeaways for the electrical systems stocks, including LSI (NASDAQ:LYTS) 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 13 electrical systems stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was 0.8% below.
Luckily, electrical systems stocks have performed well with share prices up 10.1% on average since the latest earnings results.
Best Q2: LSI (NASDAQ:LYTS)
Enhancing commercial environments, LSI (NASDAQ:LYTS) provides lighting and display solutions for businesses and retailers.
LSI reported revenues of $155.1 million, up 20.2% year on year. This print exceeded analysts’ expectations by 11.6%. Overall, it was an incredible quarter for the company with a beat of analysts’ EPS and EBITDA estimates.
“LSI finished fiscal 2025 with a strong fourth quarter, increasing sales and earnings both sequentially and on a year-over-year basis,” stated James A. Clark, President and CEO of LSI.
Interestingly, the stock is up 20.1% since reporting and currently trades at $23.18.
Is now the time to buy LSI? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 $2.64 billion, up 35.1% year on year, outperforming analysts’ expectations by 12%. The business had a stunning quarter with a solid beat of analysts’ organic revenue and EBITDA estimates.
Vertiv delivered the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 26.8% since reporting. It currently trades at $181.10.
Is now the time to buy Vertiv? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: Whirlpool (NYSE:WHR)
Credited with introducing the first automatic washing machine, Whirlpool (NYSE:WHR) is a manufacturer of a variety of home appliances.
Whirlpool reported revenues of $3.77 billion, down 5.4% year on year, falling short of analysts’ expectations by 3%. It was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations and a significant miss of analysts’ revenue estimates.
As expected, the stock is down 25.2% since the results and currently trades at $73.20.
Read our full analysis of Whirlpool’s results here.
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 $286.3 million, flat year on year. This number came in 5.1% below analysts' expectations. Zooming out, it was a mixed quarter as it also recorded a solid beat of analysts’ EBITDA estimates but a significant miss of analysts’ revenue estimates.
The stock is up 39.6% since reporting and currently trades at $331.50.
Read our full, actionable report on Powell here, it’s free for active Edge members.
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 $240.5 million, down 7% year on year. This result topped analysts’ expectations by 10.8%. Overall, it was a stunning quarter as it also produced an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ revenue estimates.
The stock is down 1.7% since reporting and currently trades at $7.36.
Read our full, actionable report on Methode Electronics here, it’s free for active Edge members.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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