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 Nordson (NASDAQ:NDSN) and the rest of the professional tools and equipment stocks fared in Q2.
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 10 professional tools and equipment stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Nordson (NASDAQ:NDSN)
Founded in 1954, Nordson Corporation (NASDAQ:NDSN) manufactures dispensing equipment and industrial adhesives, sealants and coatings.
Nordson reported revenues of $741.5 million, up 12.1% year on year. This print exceeded analysts’ expectations by 2.7%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ adjusted operating income estimates.
Commenting on the Company’s fiscal 2025 third quarter results, Nordson President and Chief Executive Officer Sundaram Nagarajan said, “The Nordson team responded effectively to dynamic demand conditions in key end markets and delivered on its promises, realizing solid year-over-year organic growth in the quarter. In particular, the Advanced Technology Solutions segment delivered 15% organic sales growth. Operational excellence drove strong profit performance, increasing adjusted earnings per share by 13% and EBITDA by 15%. In this final full quarter of Atrion’s first year acquisition performance, our new employees again exceeded expectations and contributed to both sales and earnings results. Also this quarter, we maintained a strong balance sheet, delivering cash flow conversion of 180% of net income that we used to reduce debt, repurchase shares and return dividends to shareholders, while continuing to invest in the company.”
Nordson scored the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 6.6% since reporting and currently trades at $227.63.
Is now the time to buy Nordson? Access our full analysis of the earnings results here, it’s free.
Best Q2: Lincoln Electric (NASDAQ:LECO)
Headquartered in Ohio, Lincoln Electric (NASDAQ:LECO) manufactures and sells welding equipment for various industries.
Lincoln Electric reported revenues of $1.09 billion, up 6.6% year on year, outperforming analysts’ expectations by 5.1%. The business had a stunning quarter with an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 7.3% since reporting. It currently trades at $239.76.
Is now the time to buy Lincoln Electric? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $516.4 million, down 4.9% year on year, falling short of analysts’ expectations by 1.9%. It was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations.
Kennametal delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 14.8% since the results and currently trades at $21.41.
Read our full analysis of Kennametal’s results here.
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 $1.02 billion, flat year on year. This print met analysts’ expectations. Taking a step back, it was a satisfactory quarter as it also logged a solid beat of analysts’ adjusted operating income estimates but a significant miss of analysts’ EPS estimates.
The stock is down 4% since reporting and currently trades at $48.83.
Read our full, actionable report on Fortive 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 $402.8 million, up 6.2% year on year. This result topped analysts’ expectations by 2.6%. Overall, it was an exceptional quarter as it also logged an impressive beat of analysts’ EBITDA estimates.
Hillman achieved the highest full-year guidance raise among its peers. The stock is up 20.1% since reporting and currently trades at $9.78.
Read our full, actionable report on Hillman here, it’s free.
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.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.