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 vehicle parts distributors stocks fared in Q1, starting with Air Lease (NYSE:AL).
Supply chain and inventory management are themes that grew in focus after COVID wreaked havoc on the global movement of raw materials and components. Transportation parts distributors that boast reliable selection in sometimes specialized areas combined and quickly deliver products to customers can benefit from this theme. Additionally, distributors who earn meaningful revenue streams from aftermarket products can enjoy more steady top-line trends and higher margins. But like the broader industrials sector, transportation parts distributors are also at the whim of economic cycles that impact capital spending, transportation volumes, and demand for discretionary parts and components.
The 4 vehicle parts distributors stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 1.1%.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Best Q1: Air Lease (NYSE:AL)
Established by a founder of Century City in Los Angeles, Air Lease Corporation (NYSE:AL) provides aircraft leasing and financing solutions to airlines worldwide.
Air Lease reported revenues of $738.3 million, up 11.3% year on year. This print exceeded analysts’ expectations by 3.9%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EBITDA estimates.
“AL had a strong quarter with fleet expansion, healthy sales gains, significant insurance settlements related to our aircraft in Russia, and achieving our target debt to equity ratio which now allows us to consider all capital allocation opportunities. To date, we have no aircraft delivering to any country that has announced reciprocal tariffs applicable to aircraft. We continue to benefit from robust global aircraft demand in both leasing and aircraft trading as significant aircraft supply constraints persist,” said John L. Plueger, Chief Executive Officer and President.
Air Lease Total Revenue
Air Lease pulled off the biggest analyst estimates beat of the whole group. The stock is up 8% since reporting and currently trades at $52.67.
Headquartered in Texas, Rush Enterprises (NASDAQ:RUSH.A) provides truck-related services and solutions, including sales, leasing, parts, and maintenance for commercial vehicles.
Rush Enterprises reported revenues of $1.85 billion, down 1.1% year on year, outperforming analysts’ expectations by 1.4%. The business performed better than its peers, but it was unfortunately a mixed quarter with EBITDA in line with analysts’ estimates.
Rush Enterprises Total Revenue
The market seems unhappy with the results as the stock is down 5.9% since reporting. It currently trades at $48.
Originally founded to ship beer, GATX (NYSE:GATX) provides leasing and management services for railcars and other transportation assets globally.
GATX reported revenues of $421.6 million, up 11% year on year, exceeding analysts’ expectations by 1.1%. Still, it was a slower quarter as it posted a significant miss of analysts’ EBITDA estimates.
As expected, the stock is down 1.5% since the results and currently trades at $145.94.
With a focus on the CFM56 engine that powers Boeing and Airbus’s planes, FTAI Aviation (NASDAQ:FTAI) sells, leases, maintains, and repairs aircraft engines.
FTAI Aviation reported revenues of $502.1 million, up 53.7% year on year. This result missed analysts’ expectations by 2.1%. Taking a step back, it was a mixed quarter as it also produced an impressive beat of analysts’ EBITDA estimates but a significant miss of analysts’ adjusted operating income estimates.
FTAI Aviation delivered the fastest revenue growth but had the weakest performance against analyst estimates among its peers. The stock is flat since reporting and currently trades at $108.02.
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.
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