Wrapping up Q2 earnings, we look at the numbers and key takeaways for the inspection instruments stocks, including Badger Meter (NYSE:BMI) and its peers.
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 9.2% since the latest earnings results.
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. This print exceeded analysts’ expectations by 0.6%. Despite the top-line beat, it was still a softer quarter for the company with a significant miss of analysts’ EPS estimates and a miss of analysts’ EBITDA estimates.
“We delivered strong sales growth, solid profitability and robust cash flow against last year's quarterly sales high-water mark," said Kenneth C. Bockhorst, Chairman, President and Chief Executive Officer.
Unsurprisingly, the stock is down 25.6% since reporting and currently trades at $182.71.
Is now the time to buy Badger Meter? 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 and an impressive beat of analysts’ adjusted operating income estimates.
Teledyne achieved 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 1.7% since reporting. It currently trades at $546.30.
Is now the time to buy Teledyne? Access our full analysis of the earnings results here, it’s free.
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, exceeding analysts’ expectations by 2.7%. It may have had the worst quarter among its peers, but its results were still good as it also locked in a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EBITDA estimates.
Interestingly, the stock is up 3% since the results and currently trades at $168.75.
Read our full analysis of Keysight’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 print met analysts’ expectations. It was a strong quarter as it also logged 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 12.6% since reporting and currently trades at $121.
Read our full, actionable report on Itron here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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