Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at VSE Corporation (NASDAQ:VSEC) and its peers.
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 mixed Q1. As a group, revenues missed analysts’ consensus estimates by 0.6%.
In light of this news, share prices of the companies have held steady as they are up 3.6% on average since the latest earnings results.
VSE Corporation (NASDAQ:VSEC)
With roots dating back to 1959 and a strategic focus on extending the life of transportation assets, VSE Corporation (NASDAQ:VSEC) provides aftermarket parts distribution and maintenance, repair, and overhaul services for aircraft and vehicle fleets in commercial and government markets.
VSE Corporation reported revenues of $256 million, up 6% year on year. This print fell short of analysts’ expectations by 6.7%, but it was still a very strong quarter for the company with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
"We proudly delivered record revenue and profitability in the first quarter and completed a critical chapter in our multi-year strategic transformation into a pure-play aviation aftermarket parts and services provider," said John Cuomo, President and CEO of VSE Corporation.
VSE Corporation Total Revenue
VSE Corporation delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 9.6% since reporting and currently trades at $129.14.
Formerly known as Systemax, Global Industrial (NYSE:GIC) distributes industrial and commercial products to businesses and institutions.
Global Industrial reported revenues of $321 million, flat year on year, outperforming analysts’ expectations by 4.6%. The business had an incredible quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Global Industrial Total Revenue
Global Industrial pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 16.6% since reporting. It currently trades at $25.81.
Founded in 1952, Distribution Solutions (NASDAQ:DSGR) provides supply chain solutions and distributes industrial, safety, and maintenance products to various industries.
Distribution Solutions reported revenues of $478 million, up 14.9% year on year, falling short of analysts’ expectations by 3.8%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.
Interestingly, the stock is up 1.1% since the results and currently trades at $26.36.
Founded during the emergence of Big Oil in Texas, DXP (NASDAQ:DXPE) provides pumps, valves, and other industrial components.
DXP reported revenues of $476.6 million, up 15.5% year on year. This result was in line with analysts’ expectations. Taking a step back, it was a mixed quarter as it failed to impress in some other areas of the business.
DXP achieved the fastest revenue growth among its peers. The stock is down 3.1% since reporting and currently trades at $86.
Founded as a supplier of motors, W.W. Grainger (NYSE:GWW) provides maintenance, repair, and operating (MRO) supplies and services to businesses and institutions.
W.W. Grainger reported revenues of $4.31 billion, up 1.7% year on year. This print met analysts’ expectations. Aside from that, it was a satisfactory quarter as it also produced an impressive beat of analysts’ adjusted operating income estimates but full-year revenue guidance slightly missing analysts’ expectations.
The stock is up 1.4% since reporting and currently trades at $1,037.
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 2024, a quarter in November) have propped up markets, 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.
Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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