Q2 Earnings Highlights: Methode Electronics (NYSE:MEI) Vs The Rest Of The Electrical Systems Stocks

Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Atkore and its peers.

Like many equipment and component manufacturers, electrical systems companies are buoyed by secular trends such as connectivity and industrial automation. More specific pockets of strong demand include Internet of Things (IoT) connectivity and the 5G telecom upgrade cycle, which can benefit companies whose cables and conduits fit those needs. But like the broader industrials sector, these companies are also at the whim of economic cycles. Interest rates, for example, can greatly impact projects that drive demand for these products.

The 13 electrical systems stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 2.8% while next quarter’s revenue guidance was 2.4% below.

Thankfully, share prices of the companies have been resilient as they are up 6.2% on average since the latest earnings results.

Atkore

Protecting the things that power our world, Atkore designs and manufactures electrical safety products.

Atkore reported revenues of $735 million, down 10.6% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a significant miss of analysts’ adjusted operating income estimates and full-year EBITDA guidance slightly missing analysts’ expectations.

“Atkore delivered another strong quarter of financial results, achieving Net Sales, Adjusted EBITDA and Adjusted EPS towards the top end of the ranges we presented during our last earnings call in May,” commented Bill Waltz, Atkore’s President and Chief Executive Officer.

Unsurprisingly, the stock is down 23.6% since reporting and currently trades at $58.50.

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

Best Q2: LSI

Enhancing commercial environments, LSI provides lighting and display solutions for businesses and retailers.

LSI reported revenues of $155.1 million, up 20.2% year on year, outperforming analysts’ expectations by 11.6%. The business had an incredible quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

The market seems happy with the results as the stock is up 17.8% since reporting. It currently trades at $22.74.

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

Weakest Q2: Whirlpool

Credited with introducing the first automatic washing machine, Whirlpool is a manufacturer of a variety of home appliances.

Whirlpool reported revenues of $3.77 billion, down 5.4% year on year, falling short of analysts’ expectations by 3%. It was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations significantly and a significant miss of analysts’ adjusted operating income estimates.

As expected, the stock is down 3.5% since the results and currently trades at $94.43.

Read our full analysis of Whirlpool’s results here.

Sanmina

Founded in 1980, Sanmina is an electronics manufacturing services company offering end-to-end solutions for various industries.

Sanmina reported revenues of $2.04 billion, up 10.9% year on year. This result beat analysts’ expectations by 3.1%. Aside from that, it was a mixed quarter as it also recorded an impressive beat of analysts’ adjusted operating income estimates but a significant miss of analysts’ EBITDA estimates.

The stock is up 19% since reporting and currently trades at $117.01.

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

Verra Mobility

Aiming to wrap technology and data around a historically manual and paper-based industry, Verra Mobility (NYSE:VRRM) is a leading provider of smart mobility technology to address tolls and violations, title and registration services, as well as safety and traffic enforcement.

Verra Mobility reported revenues of $236 million, up 6.1% year on year. This number surpassed analysts’ expectations by 1.3%. Zooming out, it was a mixed quarter as it also logged a decent beat of analysts’ EBITDA estimates but a miss of analysts’ adjusted operating income estimates.

The stock is down 2% since reporting and currently trades at $24.42.

Read our full, actionable report on Verra Mobility 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.

What Happened?

A number of stocks fell in the afternoon session after concerns about the health of the U.S. economy grew following a significant downward revision of job market data.

The Labor Department reported that employers added 911,000 fewer jobs from April 2024 through March than initially estimated. These "benchmark revisions" are issued annually to more accurately account for new and defunct businesses. The report detailed that the leisure and hospitality sector added 176,000 fewer jobs, professional and business services 158,000 fewer, and retailers 126,000 fewer. This weaker-than-expected data has fueled investor anxiety, as it suggests businesses may be becoming more reluctant to hire amid economic uncertainty. The numbers issued are preliminary, with final revisions scheduled for February 2026.

JPMorgan Chase CEO Jamie Dimon added that the U.S. economy is "weakening," though he stopped short of predicting a recession. "Whether it's on the way to recession or just weakening, I don't know," he said. Dimon's remarks are closely watched, given his influence as head of one of the nation's largest banks.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Agricultural Machinery company The Toro Company fell 3.2%. Is now the time to buy The Toro Company? Access our full analysis report here, it’s free.
• Construction and Maintenance Services company Primoris fell 3.2%. Is now the time to buy Primoris? Access our full analysis report here, it’s free.
• Electrical Systems company Thermon fell 2.7%. Is now the time to buy Thermon? Access our full analysis report here, it’s free.
• Electrical Systems company Kimball Electronics fell 3.2%. Is now the time to buy Kimball Electronics? Access our full analysis report here, it’s free.
• Home Builders company Champion Homes fell 3.2%. Is now the time to buy Champion Homes? Access our full analysis report here, it’s free.

Zooming In On The Toro Company (TTC)

The Toro Company’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 15 days ago when the stock gained 4.8% on the news that it received analyst upgrades from both DA Davidson and Longbow Research. DA Davidson raised its rating on the lawn care equipment manufacturer to Buy from Neutral, setting a price target of $93. The firm cited several positive factors, including strong late-spring sales according to dealer data and favorable trends in the company's residential segment. Additionally, a DA Davidson survey of golf courses suggests a promising 2025 season for Toro. Separately, Longbow Research also upgraded the stock to Buy from Neutral, assigning a higher price target of $100. The upgrades reflect a more positive outlook on improving market conditions ahead of Toro's upcoming earnings call next week.

The Toro Company is down 0.2% since the beginning of the year, and at $78.89 per share, it is trading 10.8% below its 52-week high of $88.44 from December 2024. Investors who bought $1,000 worth of The Toro Company’s shares 5 years ago would now be looking at an investment worth $967.62.

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