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As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the engineered components and systems industry, including Enpro and its peers.

Engineered components and systems companies possess technical know-how in sometimes narrow areas such as metal forming or intelligent robotics. Lately, automation and connected equipment collecting analyzable data have been trending, creating new demand. On the other hand, like the broader industrials sector, engineered components and systems companies are at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies’ offerings.

The 13 engineered components and systems stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 2.5% while next quarter’s revenue guidance was 0.5% below.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6.8% since the latest earnings results.

Enpro

Holding a Guinness World Record for creating the world's largest gasket, Enpro designs, manufactures, and sells products used for machinery in various industries.

Enpro reported revenues of $286.6 million, up 9.9% year on year. This print exceeded analysts’ expectations by 3.6%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ revenue estimates and full-year EBITDA guidance slightly topping analysts’ expectations.

“Enpro delivered another strong quarter with sales growth of almost 10% and solid profitability even as we continue growth investments in capabilities and strategic initiatives that lay the foundation for future value creation," said Eric Vaillancourt, President and Chief Executive Officer.

Unsurprisingly, the stock is down 6.6% since reporting and currently trades at $218.42.

Is now the time to buy Enpro? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Timken

Established after the founder noticed the difficulty freight wagons had making sharp turns, Timken is a provider of industrial parts used across various sectors.

Timken reported revenues of $1.16 billion, up 2.7% year on year, outperforming analysts’ expectations by 3.6%. The business had an exceptional quarter with an impressive beat of analysts’ adjusted operating income estimates and a solid beat of analysts’ revenue estimates.

The market seems content with the results as the stock is up 3.2% since reporting. It currently trades at $79.69.

Is now the time to buy Timken? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Park-Ohio

Based in Cleveland, Park-Ohio provides supply chain management services, capital equipment, and manufactured components.

Park-Ohio reported revenues of $398.6 million, down 4.5% year on year, falling short of analysts’ expectations by 4.5%. It was a disappointing quarter as it posted full-year EPS guidance missing analysts’ expectations significantly and a significant miss of analysts’ revenue estimates.

As expected, the stock is down 4.5% since the results and currently trades at $20.12.

Read our full analysis of Park-Ohio’s results here.

Gates Industrial Corporation

Helping create one of the most memorable moments for the iconic “Jurassic Park” film, Gates offers power transmission and fluid transfer equipment for various industries.

Gates Industrial Corporation reported revenues of $855.7 million, up 3% year on year. This result met analysts’ expectations. More broadly, it was a slower quarter as it recorded a significant miss of analysts’ adjusted operating income estimates and a slight miss of analysts’ organic revenue estimates.

The stock is down 14.3% since reporting and currently trades at $22.12.

Read our full, actionable report on Gates Industrial Corporation here, it’s free for active Edge members.

Applied Industrial

Formerly called The Ohio Ball Bearing Company, Applied Industrial distributes industrial products–everything from power tools to industrial valves–and services to a wide variety of industries.

Applied Industrial reported revenues of $1.2 billion, up 9.2% year on year. This number surpassed analysts’ expectations by 1.1%. Overall, it was a strong quarter as it also logged a decent beat of analysts’ EBITDA estimates and a decent beat of analysts’ adjusted operating income estimates.

The stock is down 4.2% since reporting and currently trades at $249.08.

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

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Applied Industrial and the rest of the engineered components and systems stocks fared in Q3.

Engineered components and systems companies possess technical know-how in sometimes narrow areas such as metal forming or intelligent robotics. Lately, automation and connected equipment collecting analyzable data have been trending, creating new demand. On the other hand, like the broader industrials sector, engineered components and systems companies are at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies’ offerings.

The 13 engineered components and systems stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 2.5% while next quarter’s revenue guidance was 0.5% below.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 8.6% since the latest earnings results.

Applied Industrial

Formerly called The Ohio Ball Bearing Company, Applied Industrial distributes industrial products–everything from power tools to industrial valves–and services to a wide variety of industries.

Applied Industrial reported revenues of $1.2 billion, up 9.2% year on year. This print exceeded analysts’ expectations by 1.1%. Overall, it was a strong quarter for the company with a decent beat of analysts’ EBITDA estimates.

Neil A. Schrimsher, Applied’s President & Chief Executive Officer, commented, “We had a solid first quarter, delivering double-digit EBITDA and EPS growth that exceeded our expectations. Total sales increased 9% year over year on stronger organic sales growth and M&A contribution. Organic growth was led by our shorter-cycle Service Center segment reflecting traction with internal initiatives, firming technical MRO demand, and our industry position. Engineered Solutions segment organic sales were relatively unchanged from the prior year but remain favorably positioned with segment orders continuing to trend positive. In addition, favorable operating leverage, cost control, and channel execution resulted in first quarter EBITDA margins of 12.2% expanding nearly 50 basis points over the prior-year period, which was ahead of our guidance. Overall, I’m encouraged by our teams’ ongoing execution and the positive momentum building across Applied.”

Unsurprisingly, the stock is down 4.2% since reporting and currently trades at $248.99.

Is now the time to buy Applied Industrial? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Timken

Established after the founder noticed the difficulty freight wagons had making sharp turns, Timken is a provider of industrial parts used across various sectors.

Timken reported revenues of $1.16 billion, up 2.7% year on year, outperforming analysts’ expectations by 3.6%. The business had an exceptional quarter with an impressive beat of analysts’ adjusted operating income estimates and a solid beat of analysts’ revenue estimates.

However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $77.39.

Is now the time to buy Timken? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Park-Ohio

Based in Cleveland, Park-Ohio provides supply chain management services, capital equipment, and manufactured components.

Park-Ohio reported revenues of $398.6 million, down 4.5% year on year, falling short of analysts’ expectations by 4.5%. It was a disappointing quarter as it posted full-year EPS guidance missing analysts’ expectations and a significant miss of analysts’ revenue estimates.

As expected, the stock is down 6.3% since the results and currently trades at $19.74.

Read our full analysis of Park-Ohio’s results here.

Mayville Engineering

Originally founded solely on tool and die manufacturing, Mayville Engineering Company specializes in metal fabrication, tube bending, and welding to be used in various industries.

Mayville Engineering reported revenues of $144.3 million, up 6.6% year on year. This print surpassed analysts’ expectations by 2.8%. It was an exceptional quarter as it also put up a beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.

The stock is down 13.5% since reporting and currently trades at $15.60.

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

ESCO

A developer of the communication systems used in the Batmobile of “The Dark Knight,” ESCO is a provider of engineered components for the aerospace, defense, and utility sectors.

ESCO reported revenues of $352.7 million, up 18.1% year on year. This result topped analysts’ expectations by 15.1%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ revenue estimates and full-year EPS guidance exceeding analysts’ expectations.

ESCO scored the biggest analyst estimates beat among its peers. The stock is up 3.5% since reporting and currently trades at $217.50.

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

Applied Industrial’s third quarter results came in above Wall Street’s expectations, supported by strong execution in its Service Center segment and continuing improvements in demand across key industrial markets. Management highlighted that the Service Center team achieved notable gains, leveraging sales growth into higher earnings through tight cost control and effective margin management. CEO Neil Schrimsher said, “Strengthening service center sales growth is an encouraging sign for both the segment as well as our broader operations,” referencing improved activity in areas such as machinery, metals, and food and beverage. Meanwhile, the Engineered Solutions segment sustained positive order momentum, even as some project conversions occurred later in the quarter.

Is now the time to buy AIT? Find out in our full research report (it’s free for active Edge members).

Applied Industrial (AIT) Q3 CY2025 Highlights:

• Revenue: $1.2 billion vs analyst estimates of $1.19 billion (9.2% year-on-year growth, 1.1% beat)
• EPS (GAAP): $2.63 vs analyst estimates of $2.48 (6.1% beat)
• Adjusted EBITDA: $146.3 million vs analyst estimates of $142.7 million (12.2% margin, 2.5% beat)
• EPS (GAAP) guidance for the full year is $10.48 at the midpoint, roughly in line with what analysts were expecting
• Operating Margin: 10.8%, in line with the same quarter last year
• Organic Revenue rose 2.9% year on year vs analyst estimates of 2.1% growth (76.3 basis point beat)
• Market Capitalization: $9.56 billion

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Applied Industrial’s Q3 Earnings Call

• David Manthey (Baird): Asked about potential holiday shutdowns and how customer activity might affect the end-of-year quarter. CEO Neil Schrimsher noted it was too early for definitive trends, but anticipated a mix of project maintenance and some downtime among customers.
• Peter Costa (Mizuho): Questioned whether Engineered Solutions could outperform Service Center in the second half. Schrimsher indicated that backlog and project conversions should drive Engineered Solutions’ growth later in the year.
• Sabrina Abrams (Bank of America): Sought clarification on order conversion timing and whether delays were customer-driven. Schrimsher explained that project complexity and scheduling were the main factors, not widespread customer hesitation.
• Kenneth Newman (KeyBanc): Inquired about recent order trends and confidence in Engineered Solutions’ backlog conversion. Schrimsher expressed optimism, citing strong pipelines in data centers and life sciences, but acknowledged some softness in MRO business within flow control.
• Christopher Dankert (Loop Capital): Asked for detail on margin dynamics and Hydradyne synergies. CFO Dave Wells highlighted the sequential EBITDA growth at Hydradyne and noted benefits from AR provisioning and ongoing cost initiatives.

Catalysts in Upcoming Quarters

Over the coming quarters, our analyst team will be closely watching (1) the pace at which Engineered Solutions’ backlog converts to revenue, particularly in automation and data center applications; (2) the continued integration progress and synergy realization from the Hydradyne acquisition; and (3) management’s ability to navigate trade policy uncertainties and maintain pricing discipline. Execution on capital deployment—especially in M&A and organic automation investments—will also be key to tracking Applied Industrial’s performance trajectory.

Applied Industrial currently trades at $256.98, down from $260.13 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

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