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 engineered components and systems stocks fared in Q2, starting with ESCO (NYSE: ESE).

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 mixed Q2. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.

In light of this news, share prices of the companies have held steady as they are up 1.4% on average since the latest earnings results.

Weakest Q2: ESCO (NYSE: ESE)

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 $296.3 million, up 13.6% year on year. This print fell short of analysts’ expectations by 7%. Overall, it was a disappointing quarter for the company with full-year revenue guidance missing analysts’ expectations.

Bryan Sayler, Chief Executive Officer and President, commented, “It has been a transformational period at ESCO as we have focused on integrating ESCO Maritime Solutions (Maritime) and finalizing the divestiture of VACCO Industries. With the completion of these transactions, we have taken an important step forward in the evolution of ESCO. We now have a meaningfully larger Navy business and have exited the space business. The impact of these changes can be seen both in our top and bottom line results, as our Sales increased 27 percent, Adjusted EPS from Continuing Operations increased 25 percent, and Adjusted EBIT margin increased 180 basis points to 21.1 percent in the quarter.

ESCO scored the fastest revenue growth but had the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is up 7.9% since reporting and currently trades at $205.39.

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

Best Q2: Arrow Electronics (NYSE: ARW)

Founded as a single retail store, Arrow Electronics (NYSE: ARW) provides electronic components and enterprise computing solutions to businesses globally.

Arrow Electronics reported revenues of $7.58 billion, up 10% year on year, outperforming analysts’ expectations by 5.9%. The business had an exceptional quarter with a beat of analysts’ EPS estimates.

Arrow Electronics scored the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 2.2% since reporting. It currently trades at $127.06.

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

Enpro (NYSE: NPO)

Holding a Guinness World Record for creating the world's largest gasket, Enpro (NYSE: NPO) designs, manufactures, and sells products used for machinery in various industries.

Enpro reported revenues of $288.1 million, up 6% year on year, exceeding analysts’ expectations by 1.9%. Still, it was a slower quarter as it posted full-year revenue guidance missing analysts’ expectations significantly and a miss of analysts’ EBITDA estimates.

Enpro delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 2.8% since the results and currently trades at $221.03.

Read our full analysis of Enpro’s results here.

Applied Industrial (NYSE: AIT)

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 $1.22 billion, up 5.5% year on year. This result surpassed analysts’ expectations by 3.5%. Overall, it was a strong quarter as it also recorded an impressive beat of analysts’ organic revenue estimates and a decent beat of analysts’ EBITDA estimates.

The stock is down 4.4% since reporting and currently trades at $263.45.

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

Worthington (NYSE: WOR)

Founded by a steel salesman, Worthington (NYSE: WOR) specializes in steel processing, pressure cylinders, and engineered cabs for commercial markets.

Worthington reported revenues of $317.9 million, flat year on year. This print beat analysts’ expectations by 5.6%. It was a very strong quarter as it also put up a beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.

The stock is up 7.5% since reporting and currently trades at $64.64.

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

Market Update

Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

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