Q4 Earnings Outperformers: Graham Corporation (NYSE:GHM) And The Rest Of The Engineered Components and Systems Stocks
March 12, 2025
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Graham Corporation (NYSE:GHM) and the rest of the engineered components and systems stocks fared in Q4.
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 13 engineered components and systems stocks we track reported a satisfactory Q4. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 0.5% below.
While some engineered components and systems stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.3% since the latest earnings results.
Graham Corporation (NYSE:GHM)
Founded when its founder patented a unique design for a vacuum system used in the sugar refining process, Graham (NYSE:GHM) provides vacuum and heat transfer equipment for the energy, petrochemical, refining, and chemical sectors.
Graham Corporation reported revenues of $47.04 million, up 7.3% year on year. This print fell short of analysts’ expectations by 5%. Overall, it was a mixed quarter for the company with an impressive beat of analysts’ EPS estimates but full-year revenue guidance slightly missing analysts’ expectations.
“Our strong performance through the first three quarters of our fiscal year reflects continually improving execution across our business. Customer demand for our diversified product portfolio is robust, driving margin expansion through improved product mix and operational efficiency. The progress we have shown to date, coupled with advancing discussions on both new programs and expansions with existing customers, reinforces our confidence in achieving our long-term growth targets,” said Daniel J. Thoren, Chief Executive Officer.
Graham Corporation delivered the weakest performance against analyst estimates and weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 31.6% since reporting and currently trades at $32.20.
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 $247 million, up 13.2% year on year, outperforming analysts’ expectations by 2.8%. The business had a stunning quarter with EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EPS estimates.
ESCO delivered the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 20.9% since reporting. It currently trades at $159.90.
Headquartered in Milwaukee, Regal Rexnord (NYSE:RRX) provides power transmission and industrial automation products.
Regal Rexnord reported revenues of $1.46 billion, down 9.1% year on year, falling short of analysts’ expectations by 1.9%. It was a disappointing quarter as it posted full-year EPS guidance missing analysts’ expectations and a significant miss of analysts’ adjusted operating income estimates.
As expected, the stock is down 23.4% since the results and currently trades at $118.63.
Formerly called The Ohio Ball Bearing Company, Applied Industrial (NYSE:AIT) distributes industrial products–everything from power tools to industrial valves–and services to a wide variety of industries.
Applied Industrial reported revenues of $1.07 billion, flat year on year. This print was in line with analysts’ expectations. It was a strong quarter as it also recorded a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EBITDA estimates.
The stock is down 9.4% since reporting and currently trades at $228.11.
Formerly known as Nuturn, NN (NASDAQ:NNBR) provides metal components, bearings, and plastic and rubber components to the automotive, aerospace, medical, and industrial sectors.
NN reported revenues of $106.5 million, down 5.3% year on year. This number lagged analysts' expectations by 1.9%. Taking a step back, it was still a strong quarter as it produced a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
NN achieved the highest full-year guidance raise among its peers. The stock is down 2.8% since reporting and currently trades at $2.63.
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