Dj Cfo Lauber Surrenders 13829 Of Douglas Dynamics Inc >Plow

Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Caterpillar and its peers.

Automation that increases efficiencies and connected equipment that collects analyzable data have been trending, creating new demand for heavy machinery and equipment companies. The gradual transition to clean energy also allows companies to innovate around emissions, potentially spurring replacement cycles that can accelerate revenue growth. On the other hand, heavy machinery companies are at the whim of economic cycles. Interest rates, for example, can greatly impact the commercial and residential construction that drives demand for these companies’ offerings.

The 22 heavy machinery stocks we track reported a mixed Q3. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.

In light of this news, share prices of the companies have held steady as they are up 1.1% on average since the latest earnings results.

Best Q3: Caterpillar

With its iconic yellow machinery working on construction sites, Caterpillar manufactures construction equipment like bulldozers, excavators, and parts and maintenance services.

Caterpillar reported revenues of $17.64 billion, up 9.5% year on year. This print exceeded analysts’ expectations by 6.1%. Overall, it was a stunning quarter for the company with a solid beat of analysts’ organic revenue estimates and an impressive beat of analysts’ EBITDA estimates.

"Solid performance from our team generated strong results this quarter, driven by resilient demand and focused execution across our three primary segments," said Caterpillar CEO Joe Creed.

Interestingly, the stock is up 9.4% since reporting and currently trades at $573.95.

REV Group

Offering the first full-electric North American fire truck, REV manufactures and sells specialty vehicles.

REV Group reported revenues of $664.4 million, up 11.1% year on year, outperforming analysts’ expectations by 4.5%. The business had a stunning quarter with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.

The market seems happy with the results as the stock is up 9.3% since reporting. It currently trades at $60.80.

Weakest Q3: Wabash

With its first trailer reportedly built on two sawhorses, Wabash offers semi trailers, liquid transportation containers, truck bodies, and equipment for moving goods.

Wabash reported revenues of $381.6 million, down 17.8% year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations significantly and full-year EPS guidance missing analysts’ expectations significantly.

Wabash delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 3.5% since the results and currently trades at $8.60.

Read our full analysis of Wabash’s results here.

Blue Bird

With around a century of experience, Blue Bird is a manufacturer of school buses and complementary parts.

Blue Bird reported revenues of $409.4 million, up 16.9% year on year. This number beat analysts’ expectations by 7.7%. It was a very strong quarter as it also produced a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.

Blue Bird achieved the biggest analyst estimates beat among its peers. The stock is down 15.1% since reporting and currently trades at $46.60.

Read our full, actionable report on Blue Bird here, it’s free for active Edge members.

Douglas Dynamics

Once manufacturing snowplows designed for the iconic jeep vehicle precursor, Douglas Dynamics offers snow and ice equipment for the roads and sidewalks.

Douglas Dynamics reported revenues of $162.1 million, up 25.3% year on year. This print lagged analysts' expectations by 0.7%. Zooming out, it was actually a strong quarter as it put up an impressive beat of analysts’ EBITDA estimates and full-year EBITDA guidance slightly topping analysts’ expectations.

Douglas Dynamics delivered the fastest revenue growth among its peers. The stock is up 10% since reporting and currently trades at $32.66.

Read our full, actionable report on Douglas Dynamics here, it’s free for active Edge members.

What Happened?

A number of stocks jumped in the afternoon session after the Federal Reserve lowered its benchmark interest rate by a quarter-percentage point, signaling a more accommodative monetary policy. 

This dovish action, combined with highly accommodating signals from Chair Jerome Powell and the Federal Open Market Committee (FOMC), sent the Dow Jones Industrial Average and S&P 500 surging.The market's bullish reaction was rooted in several key takeaways from the Fed's announcement. Most significantly, the central bank confirmed it would begin expanding its balance sheet by buying short-term bonds, a move that injects critical liquidity and lowers short-term Treasury yields. Furthermore, the Fed signaled a shift in priority by removing language that described the labor market as "remaining low," suggesting it would be more focused on supporting economic growth. While the Fed's official forecast projected only one cut for the next year, traders immediately priced in the expectation of more aggressive easing, banking on at least two rate reductions. This widespread anticipation of sustained, low borrowing costs and the virtual certainty that rate hikes would be off the table boosted corporate valuations and created powerful momentum for the equity market rally.

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:

• Heavy Transportation Equipment company Douglas Dynamics jumped 4.9%. Is now the time to buy Douglas Dynamics? Access our full analysis report here, it’s free for active Edge members.
• Ground Transportation company Old Dominion Freight Line jumped 5.9%. Is now the time to buy Old Dominion Freight Line? Access our full analysis report here, it’s free for active Edge members.
• Electrical Systems company Thermon jumped 4.7%. Is now the time to buy Thermon? Access our full analysis report here, it’s free for active Edge members.
• Maintenance and Repair Distributors company DXP jumped 4.6%. Is now the time to buy DXP? Access our full analysis report here, it’s free for active Edge members.
• Renewable Energy company Enphase jumped 5.1%. Is now the time to buy Enphase? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Old Dominion Freight Line (ODFL)

Old Dominion Freight Line’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 7 days ago when the stock gained 4.3% on the news that investors focused on improved pricing power despite a drop in shipping volumes reported in the company's November operational update. The company reported that its revenue per day decreased by 4.4% compared to the same month in the previous year. This drop resulted from a 10.0% decrease in less-than-truckload (LTL) tons per day. However, the decline was partly offset by an increase in LTL revenue per hundredweight, a key measure of pricing. The stock's positive reaction suggested that investors weighed the stronger pricing more heavily than the fall in shipping volume. Separately, an analyst at B of A Securities maintained a Neutral rating on the stock while raising the price target.

Old Dominion Freight Line is down 10.5% since the beginning of the year, and at $157.35 per share, it is trading 24.8% below its 52-week high of $209.29 from February 2025. Investors who bought $1,000 worth of Old Dominion Freight Line’s shares 5 years ago would now be looking at an investment worth $1,584.