Let’s dig into the relative performance of Itron (NASDAQ:ITRI) and its peers as we unravel the now-completed Q3 inspection instruments earnings season.
Measurement and inspection instrument companies may enjoy more steady demand because products such as water meters are non-discretionary and mandated for replacement at predictable intervals. In the last decade, digitization and data collection have driven innovation in the space, leading to incremental sales. But like the broader industrials sector, measurement and inspection instrument companies are at the whim of economic cycles. Interest rates, for example, can greatly impact civil, commercial, and residential construction projects that drive demand.
The 4 inspection instruments stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 8.8% since the latest earnings results.
Weakest Q3: Itron (NASDAQ:ITRI)
Founded by a small group of engineers who wanted to build a more efficient way to read utility meters, Itron (NASDAQ:ITRI) offers energy and water management products for the utility industry, municipalities, and industrial customers.
Itron reported revenues of $581.6 million, down 5.5% year on year. This print exceeded analysts’ expectations by 0.6%. Overall, it was a strong quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ adjusted operating income estimates.
"Itron delivered third quarter results with record margin, profitability, and cash flow," said Tom Deitrich, Itron’s president and CEO.
Itron delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Unsurprisingly, the stock is down 28.7% since reporting and currently trades at $98.57.
Is now the time to buy Itron? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: Keysight (NYSE:KEYS)
Spun off from Hewlett-Packard in 2014, Keysight (NYSE:KEYS) offers electronic measurement products for use in various sectors.
Keysight reported revenues of $1.42 billion, up 10.3% year on year, outperforming analysts’ expectations by 2.5%. The business had an exceptional quarter with an impressive beat of analysts’ backlog estimates and EPS guidance for next quarter exceeding analysts’ expectations.
Keysight achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 10.3% since reporting. It currently trades at $196.
Is now the time to buy Keysight? Access our full analysis of the earnings results here, it’s free for active Edge members.
Teledyne (NYSE:TDY)
Playing a role in mapping the ocean floor as we know it today, Teledyne (NYSE:TDY) offers digital imaging and instrumentation products for various industries.
Teledyne reported revenues of $1.54 billion, up 6.7% year on year, exceeding analysts’ expectations by 0.8%. It may have had the worst quarter among its peers, but its results were still good as it also locked in an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.
As expected, the stock is down 13.3% since the results and currently trades at $497.60.
Read our full analysis of Teledyne’s results here.
Badger Meter (NYSE:BMI)
The developer of the world’s first frost-proof water meter in 1905, Badger Meter (NYSE:BMI) provides water control and measure equipment to various industries.
Badger Meter reported revenues of $235.7 million, up 13.1% year on year. This result topped analysts’ expectations by 1.8%. Overall, it was an exceptional quarter as it also recorded a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.
Badger Meter scored the fastest revenue growth among its peers. The stock is down 3.7% since reporting and currently trades at $180.44.
Read our full, actionable report on Badger Meter 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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