Richardson Electronics Ltd

Herc Holdings will announce its second-quarter earnings this Tuesday before the bell. The equipment rental company previously reported revenues of $1.14 billion last quarter, up 32.3% year on year, but its full-year revenue guidance missed analyst expectations significantly. For this quarter, the market expects revenue growth of 14.6% year on year, a slowdown from the 18.2% increase in the same quarter last year. Among peers in the industrial distributors segment, Richardson Electronics posted a 27.6% revenue gain and beat estimates by 19.6%, while United Rentals grew revenues 11.8% and topped estimates by 4.9%. Herc shares are up 11.1% over the last month, heading into earnings with an average analyst price target of $174.83 compared to the current share price of $162.59.

Richardson Electronics expects to announce a multimillion-dollar order for its battery energy storage systems in the first quarter, following a fiscal fourth quarter in which consolidated net sales rose 27.6% to $66.2 million. Chairman, CEO and President Edward Richardson said the company saw strength across all three business units, while Executive Vice President Gregory Peloquin noted the Green Energy Solutions unit shipped its first BES program in the fourth quarter and has a growing pipeline of nearly 50 active opportunities. Consolidated gross margin was 31.2%, operating income reached $3.9 million, and net income was $3.7 million, or $0.25 per diluted share. The Power and Microwave Technologies group led growth with a 28.1% sales increase, and the Canvys division set a quarterly revenue record of $12.3 million with a backlog of $40.8 million and a book-to-bill ratio of 1.3. Cash and equivalents stood at $31.8 million with no outstanding debt, and the board declared a regular quarterly cash dividend of $0.06 per common share.

Herc Holdings reported first-quarter revenues of $1.14 billion, up 32.3% year on year and beating analyst estimates by 5.3%, making it the fastest-growing and biggest beat among the eight specialty equipment distributors tracked. The company completed the integration of its H&E acquisition, the largest in industry history, adding 25% more specialty locations and expanding its sales network. However, Herc issued full-year revenue guidance that missed expectations significantly, the weakest update in the group. Richardson Electronics posted the best overall quarter with a 4.4% revenue beat and strong EPS and EBITDA outperformance, while SiteOne Landscape Supply had the weakest results, missing revenue estimates by 4.2% and falling short on operating income and EPS. Custom Truck One Source delivered the highest full-year guidance raise among peers, and Hudson Technologies recorded the highest guidance raise but missed operating income and EPS estimates.

Industrial distributors stocks reported mixed first-quarter results, with Rush Enterprises posting a 9% year-on-year revenue decline to $1.68 billion, missing analyst estimates by 2.5%. Richardson Electronics led the group with a 3.1% revenue increase to $55.47 million, beating expectations by 4.4% and driving its stock up 53.7% since reporting. DXP Enterprises saw revenue rise 9.5% to $521.7 million but missed estimates by 1.9%, sending shares down 7.5%. Distribution Solutions grew revenue 3.8% to $496 million, topping forecasts by 1.4%, while VSE Corporation surged 26.8% to $324.6 million, exceeding expectations by 3.8%. Overall, the 24 tracked industrial distributors beat consensus revenue estimates by 2.1% but guided next quarter's revenue 1.2% below expectations, with average share prices up 6.8% since earnings.

The 24 industrial distributors tracked by StockStory reported a satisfactory first quarter, with aggregate revenues beating analyst consensus by 2.1% while next-quarter revenue guidance came in 1.2% below estimates. GATX posted revenue of $583.7 million, up 38.4% year on year but missing expectations by 2.7%, and its stock fell 11.2% since the report. Richardson Electronics delivered the best performance of the group, with revenue of $55.47 million beating estimates by 4.4% and its stock surging 55%. DXP Enterprises was the weakest, with revenue of $521.7 million missing estimates by 1.9% and its stock declining 4.1%. W.W. Grainger reported revenue of $4.74 billion, exceeding estimates by 3.6% and issuing the highest full-year guidance raise among peers, sending its stock up 16.7%.