Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Keysight (NYSE: KEYS) and the best and worst performers in the inspection instruments industry.
Measurement and inspection instrument companies may enjoy more steady demand because products such as water meters are non-discretionary and mandated for replacement at predictable intervals. In the last decade, digitization and data collection have driven innovation in the space, leading to incremental sales. But like the broader industrials sector, measurement and inspection instrument companies are at the whim of economic cycles. Interest rates, for example, can greatly impact civil, commercial, and residential construction projects that drive demand.
The 4 inspection instruments stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.7% since the latest earnings results.
Keysight (NYSE: KEYS)
Spun off from Hewlett-Packard in 2014, Keysight (NYSE: KEYS) offers electronic measurement products for use in various sectors.
Keysight reported revenues of $1.35 billion, up 11.1% year on year. This print exceeded analysts’ expectations by 2.7%. Overall, it was a strong quarter for the company with a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EBITDA estimates.
Keysight pulled off the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 7.8% since reporting and currently trades at $176.54.
Is now the time to buy Keysight? Access our full analysis of the earnings results here, it’s free.
Best Q2: Teledyne (NYSE: TDY)
Playing a role in mapping the ocean floor as we know it today, Teledyne (NYSE: TDY) offers digital imaging and instrumentation products for various industries.
Teledyne reported revenues of $1.51 billion, up 10.2% year on year, outperforming analysts’ expectations by 2.7%. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates.
Teledyne delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 6.6% since reporting. It currently trades at $592.38.
Is now the time to buy Teledyne? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Badger Meter (NYSE: BMI)
The developer of the world’s first frost-proof water meter in 1905, Badger Meter (NYSE: BMI) provides water control and measure equipment to various industries.
Badger Meter reported revenues of $238.1 million, up 9.9% year on year, exceeding analysts’ expectations by 0.6%. Still, it was a softer quarter as it posted a significant miss of analysts’ EPS estimates.
As expected, the stock is down 27.3% since the results and currently trades at $178.58.
Read our full analysis of Badger Meter’s results here.
Itron (NASDAQ: ITRI)
Founded by a small group of engineers who wanted to build a more efficient way to read utility meters, Itron (NASDAQ: ITRI) offers energy and water management products for the utility industry, municipalities, and industrial customers.
Itron reported revenues of $606.8 million, flat year on year. This result met analysts’ expectations. It was a strong quarter as it also put up EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.
Itron had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 10.1% since reporting and currently trades at $124.50.
Read our full, actionable report on Itron 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.
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