Q3 Earnings Outperformers: Illinois Tool Works (NYSE:ITW) And The Rest Of The General Industrial Machinery Stocks

As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the general industrial machinery industry, including Illinois Tool Works (NYSE:ITW) and its peers.

Automation that increases efficiency and connected equipment that collects analyzable data have been trending, creating new demand for general industrial machinery companies. Those who innovate and create digitized solutions can spur sales and speed up replacement cycles, but all general industrial machinery companies are still 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 15 general industrial machinery stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 1.6% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 3.6% on average since the latest earnings results.

Illinois Tool Works (NYSE:ITW)

Founded by Byron Smith, an investor who held over 100 patents, Illinois Tool Works (NYSE:ITW) manufactures engineered components and specialized equipment for numerous industries.

Illinois Tool Works reported revenues of $4.06 billion, up 2.3% year on year. This print fell short of analysts’ expectations by 0.8%. Overall, it was a mixed quarter for the company with a beat of analysts’ EPS estimates but a slight miss of analysts’ revenue estimates.

"The ITW team concluded the third quarter with solid operational and financial execution, delivering EPS of $2.81, which grew six percent year-over-year excluding the divestiture gain, alongside record operating margin of 27.4 percent, and a 15 percent increase in free cash flow. This outcome underscores the fundamental strength of the ITW Business Model, the inherent resilience of our diversified portfolio, and the high-quality execution demonstrated by our colleagues worldwide," said Christopher A. O’Herlihy, President and Chief Executive Officer.

The stock is down 1.8% since reporting and currently trades at $252.70.

Read our full report on Illinois Tool Works here, it’s free for active Edge members.

Best Q3: Hillenbrand (NYSE:HI)

Hillenbrand, Inc. (NYSE: HI) is an industrial company that designs, manufactures, and sells highly engineered processing equipment and solutions for various industries.

Hillenbrand reported revenues of $652.1 million, down 22.1% year on year, outperforming analysts’ expectations by 9.8%. The business had an incredible quarter with a beat of analysts’ EPS and EBITDA estimates.

However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $31.67.

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

Weakest Q3: Albany (NYSE:AIN)

Founded in 1895, Albany (NYSE:AIN) is a global textiles and materials processing company, specializing in machine clothing for paper mills and engineered composite structures for aerospace and other industries.

Albany reported revenues of $261.4 million, down 12.4% year on year, falling short of analysts’ expectations by 12.8%. It was a disappointing quarter as it posted a miss of analysts’ Engineered Composites revenue estimates and a significant miss of analysts’ revenue estimates.

Albany delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 5.6% since the results and currently trades at $51.56.

Read our full analysis of Albany’s results here.

Kadant (NYSE:KAI)

Headquartered in Massachusetts, Kadant (NYSE:KAI) is a global supplier of high-value, critical components and engineered systems used in process industries worldwide.

Kadant reported revenues of $271.6 million, flat year on year. This print topped analysts’ expectations by 4.2%. Overall, it was a very strong quarter as it also produced an impressive beat of analysts’ EBITDA estimates.

Kadant had the weakest full-year guidance update among its peers. The stock is down 1.6% since reporting and currently trades at $294.35.

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

GE Aerospace (NYSE:GE)

One of the original 12 companies on the Dow Jones Industrial Average, General Electric (NYSE:GE) is a multinational conglomerate providing technologies for various sectors including aviation, power, renewable energy, and healthcare.

GE Aerospace reported revenues of $12.18 billion, up 23.8% year on year. This result beat analysts’ expectations by 17.6%. It was an exceptional quarter as it also logged a solid beat of analysts’ revenue estimates and an impressive beat of analysts’ adjusted operating income estimates.

GE Aerospace pulled off the biggest analyst estimates beat among its peers. The stock is up 4.1% since reporting and currently trades at $315.13.

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

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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