Unpacking Q2 Earnings: Otis (NYSE:OTIS) In The Context Of Other General Industrial Machinery Stocks

The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how general industrial machinery stocks fared in Q2, starting with Otis (NYSE:OTIS).

Automation that increases efficiency and connected equipment that collects analyzable data have been trending, creating new demand for general industrial machinery companies. Those who innovate and create digitized solutions can spur sales and speed up replacement cycles, but all general industrial machinery companies are still 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 14 general industrial machinery stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was 4% below.

After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.

General industrial machinery stocks have held steady amidst all this with average share prices relatively unchanged since the latest earnings results.

Credited with inventing the first hydraulic passenger elevator, Otis Worldwide (NYSE:OTIS) is an elevator and escalator manufacturing, installation and service company.

Otis reported revenues of $3.60 billion, down 3.2% year on year. This print fell short of analysts’ expectations by 3.4%. Overall, it was a softer quarter for the company with a miss of analysts’ organic revenue estimates and full-year revenue guidance missing analysts’ expectations.

Interestingly, the stock is up 5.6% since reporting and currently trades at $104.

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

Producers of the first asthma inhaler, 3M Company (NYSE:MMM) is a global conglomerate known for products in industries like healthcare, safety, electronics, and consumer goods.

3M reported revenues of $6.02 billion, down 24.7% year on year, outperforming analysts’ expectations by 3.3%. The business had an exceptional quarter with an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ organic revenue estimates.

The market seems happy with the results as the stock is up 32.7% since reporting. It currently trades at $137.18.

Is now the time to buy 3M? Access our full analysis of the earnings results here, it’s free.

Hillenbrand, Inc. (NYSE: HI) is an industrial company that designs, manufactures, and sells highly engineered processing equipment and solutions for various industries.

Hillenbrand reported revenues of $786.6 million, up 9.8% year on year, falling short of analysts’ expectations by 3.9%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations and a miss of analysts’ earnings estimates.

Hillenbrand delivered the weakest full-year guidance update in the group. As expected, the stock is down 25.6% since the results and currently trades at $28.30.

Read our full analysis of Hillenbrand’s results here.

Founded with a $2,500 loan, L.B. Foster (NASDAQ:FSTR) is a provider of products and services for the transportation and energy infrastructure sectors, including rail products, construction materials, and coating solutions.

L.B. Foster reported revenues of $140.8 million, down 4.9% year on year. This result surpassed analysts’ expectations by 2.5%. Zooming out, it was a softer quarter as it produced a miss of analysts’ earnings estimates and full-year revenue guidance missing analysts’ expectations.

The stock is down 1.5% since reporting and currently trades at $20.43.

Read our full, actionable report on L.B. Foster here, it’s free.

Originally founded in 1906 as a thermostat company, Honeywell (NASDAQ:HON) is an aerospace and defense manufacturing company building technologies, performance materials, and safety and productivity solutions.

Honeywell reported revenues of $9.58 billion, up 4.7% year on year. This print surpassed analysts’ expectations by 1.7%. It was a very strong quarter as it also put up an impressive beat of analysts’ organic revenue estimates.

Honeywell scored the highest full-year guidance raise among its peers. The stock is down 2.6% since reporting and currently trades at $207.99.

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

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