Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Coherent (NYSE: COHR) and its peers.
The sector could see higher demand as the prevalence of advanced electronics increases in industries such as automotive, healthcare, aerospace, and computing. The high-performance components and contract manufacturing expertise required for autonomous vehicles and cloud computing datacenters, for instance, will benefit companies in the space. However, headwinds include geopolitical risks, particularly U.S.-China trade tensions that could disrupt component sourcing and production as the Trump administration takes an increasingly antagonizing stance on foreign relations. Additionally, stringent environmental regulations on e-waste and emissions could force the industry to pivot in potentially costly ways.
The 10 electronic components & manufacturing stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 4.7% while next quarter’s revenue guidance was in line.
While some electronic components & manufacturing stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.7% since the latest earnings results.
Coherent (NYSE: COHR)
Created through the 2022 rebranding of II-VI Incorporated, a company with roots dating back to 1971, Coherent (NYSE: COHR) develops and manufactures advanced materials, lasers, and optical components for applications ranging from telecommunications to industrial manufacturing.
Coherent reported revenues of $1.58 billion, up 17.3% year on year. This print exceeded analysts’ expectations by 3.1%. Overall, it was a stunning quarter for the company with a solid beat of analysts’ EPS guidance for next quarter estimates and revenue guidance for next quarter exceeding analysts’ expectations.
Jim Anderson, CEO, said, “Revenue growth of 19% year-over-year in the September quarter on a pro forma basis was driven by strong demand from AI-related datacenters and communications. We expect continued strong growth throughout this fiscal year based on increasing datacenter and communications demand along with our continued production capacity expansion.”
Interestingly, the stock is up 10.2% since reporting and currently trades at $150.40.
Best Q3: Amphenol (NYSE: APH)
With over 90 years of connecting the world's technologies, Amphenol (NYSE: APH) designs and manufactures connectors, cables, sensors, and interconnect systems that enable electrical and electronic connections across virtually every industry.
Amphenol reported revenues of $6.19 billion, up 53.4% year on year, outperforming analysts’ expectations by 10.9%. The business had an incredible quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EPS guidance for next quarter estimates.
Amphenol achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 12% since reporting. It currently trades at $139.36.
Is now the time to buy Amphenol? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: CTS (NYSE: CTS)
With roots dating back to 1896 and a global manufacturing footprint, CTS (NYSE: CTS) designs and manufactures sensors, connectivity components, and actuators for aerospace, defense, industrial, medical, and transportation markets.
CTS reported revenues of $143 million, up 8% year on year, exceeding analysts’ expectations by 4.8%. It was a satisfactory quarter as it also posted a solid beat of analysts’ revenue estimates but a significant miss of analysts’ EPS estimates.
As expected, the stock is down 1.8% since the results and currently trades at $41.68.
Read our full analysis of CTS’s results here.
Knowles (NYSE: KN)
With roots dating back to 1946 and a focus on components that must perform flawlessly in critical situations, Knowles (NYSE: KN) designs and manufactures specialized electronic components like high-performance capacitors, microphones, and speakers for medical technology, defense, and industrial applications.
Knowles reported revenues of $152.9 million, up 7.3% year on year. This print topped analysts’ expectations by 2.6%. It was a very strong quarter as it also logged a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.
The stock is down 12% since reporting and currently trades at $21.13.
Read our full, actionable report on Knowles here, it’s free for active Edge members.
Jabil (NYSE: JBL)
With manufacturing facilities spanning the globe from China to Mexico to the United States, Jabil (NYSE: JBL) provides electronics design, manufacturing, and supply chain solutions to companies across various industries, from healthcare to automotive to cloud computing.
Jabil reported revenues of $8.25 billion, up 18.5% year on year. This number surpassed analysts’ expectations by 9.5%. Overall, it was an exceptional quarter as it also produced an impressive beat of analysts’ EPS guidance for next quarter estimates and a solid beat of analysts’ revenue estimates.
Jabil had the weakest full-year guidance update among its peers. The stock is down 9.5% since reporting and currently trades at $203.88.
Read our full, actionable report on Jabil here, it’s free for active Edge members.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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