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 WESCO (NYSE:WCC) and the rest of the maintenance and repair distributors stocks fared in Q3.
Supply chain and inventory management are themes that grew in focus after COVID wreaked havoc on the global movement of raw materials and components. Maintenance and repair distributors that boast reliable selection and quickly deliver products to customers can benefit from this theme. While e-commerce hasn’t disrupted industrial distribution as much as consumer retail, it is still a real threat, forcing investment in omnichannel capabilities to serve customers everywhere. Additionally, maintenance and repair distributors are at the whim of economic cycles that impact the capital spending and construction projects that can juice demand.
The 8 maintenance and repair distributors stocks we track reported a slower Q3. As a group, revenues were in line with analysts’ consensus estimates.
In light of this news, share prices of the companies have held steady as they are up 4.9% on average since the latest earnings results.
WESCO (NYSE:WCC)
Based in Pittsburgh, WESCO (NYSE:WCC) provides electrical, industrial, and communications products and augments them with services such as supply chain management.
WESCO reported revenues of $5.49 billion, down 2.7% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with a solid beat of analysts’ EPS estimates but organic revenue in line with analysts’ estimates.
“We had a strong close to our third quarter, with sales slightly up compared to the second quarter driven by accelerating momentum in our Communications and Security Solutions segment, including double-digit sales growth in our global data center business.” said John Engel, Chairman, President and CEO.
Interestingly, the stock is up 14.8% since reporting and currently trades at $204.21.
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Best Q3: DXP (NASDAQ:DXPE)
Founded during the emergence of Big Oil in Texas, DXP (NASDAQ:DXPE) provides pumps, valves, and other industrial components.
DXP reported revenues of $472.9 million, up 12.8% year on year, outperforming analysts’ expectations by 6.8%. The business had an incredible quarter with an impressive beat of analysts’ EPS and EBITDA estimates.
DXP achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 36.7% since reporting. It currently trades at $69.62.
Weakest Q3: Global Industrial (NYSE:GIC)
Formerly known as Systemax, Global Industrial (NYSE:GIC) distributes industrial and commercial products to businesses and institutions.
Global Industrial reported revenues of $342.4 million, down 3.4% year on year, falling short of analysts’ expectations by 3.1%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
As expected, the stock is down 15.8% since the results and currently trades at $27.87.
Fastenal (NASDAQ:)
Founded in 1967, Fastenal (NASDAQ:FAST) provides industrial and construction supplies, including fasteners, tools, safety products, and many other product categories to businesses globally.
Fastenal reported revenues of $1.91 billion, up 3.5% year on year. This print met analysts’ expectations. Zooming out, it was a decent quarter as it also produced a narrow beat of analysts’ EPS estimates.
The stock is up 17.7% since reporting and currently trades at $82.36.
Transcat (NASDAQ:)
Serving the pharmaceutical, industrial manufacturing, energy, and chemical process industries, Transcat (NASDAQ:TRNS) provides measurement instruments and supplies.
Transcat reported revenues of $67.83 million, up 8% year on year. This number missed analysts’ expectations by 3.5%. Overall, it was a disappointing quarter as it also recorded a significant miss of analysts’ EBITDA and EPS estimates.
Transcat had the weakest performance against analyst estimates among its peers. The stock is down 12% since reporting and currently trades at $104.96.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September, a quarter in November) have kept 2024 stock markets frothy, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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This content was originally published on Stock Story
