Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at DNOW (NYSE: DNOW) and its peers.

Supply chain and inventory management are themes that grew in focus after COVID wreaked havoc on the global movement of raw materials and components. Distributors that boast a reliable selection of products–everything from hardhats and fasteners for jet engines to ceiling systems–and quickly deliver goods to customers can benefit from this theme. While e-commerce hasn’t disrupted industrial distribution as much as consumer retail, it is still a real threat, forcing investment in omnichannel capabilities to better interact with customers. Additionally, distributors are at the whim of economic cycles that impact the capital spending and construction projects that can juice demand.

The 24 industrial distributors stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 1.1% while next quarter’s revenue guidance was in line.

While some industrial distributors stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.8% since the latest earnings results.

DNOW (NYSE: DNOW)

Spun off from National Oilwell Varco, DNOW (NYSE: DNOW) provides distribution and supply chain solutions for the energy and industrial end markets.

DNOW reported revenues of $634 million, up 4.6% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

Unsurprisingly, the stock is down 2.7% since reporting and currently trades at $14.20.

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

Best Q3: Richardson Electronics (NASDAQ: RELL)

Founded in 1947, Richardson Electronics (NASDAQ: RELL) is a distributor of power grid and microwave tubes as well as consumables related to those products.

Richardson Electronics reported revenues of $54.61 million, up 1.6% year on year, outperforming analysts’ expectations by 6%. The business had an incredible quarter with a beat of analysts’ EPS and EBITDA estimates.

Richardson Electronics pulled off the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 3.6% since reporting. It currently trades at $10.99.

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

Weakest Q3: Alta (NYSE: ALTG)

Founded in 1984, Alta Equipment Group (NYSE: ALTG) is a provider of industrial and construction equipment and services across the Midwest and Northeast United States.

Alta reported revenues of $422.6 million, down 5.8% year on year, falling short of analysts’ expectations by 8.4%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and adjusted operating income estimates.

Alta delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 7.1% since the results and currently trades at $5.46.

Read our full analysis of Alta’s results here.

DXP (NASDAQ: DXPE)

Founded during the emergence of Big Oil in Texas, DXP (NASDAQ: DXPE) provides pumps, valves, and other industrial components.

DXP reported revenues of $513.7 million, up 8.6% year on year. This print beat analysts’ expectations by 3%. Zooming out, it was a mixed quarter as it also logged an impressive beat of analysts’ revenue estimates but a significant miss of analysts’ EPS estimates.

The stock is down 10.4% since reporting and currently trades at $109.31.

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

Rush Enterprises (NASDAQ: RUSHA)

Headquartered in Texas, Rush Enterprises (NASDAQ: RUSH.A) provides truck-related services and solutions, including sales, leasing, parts, and maintenance for commercial vehicles.

Rush Enterprises reported revenues of $1.88 billion, flat year on year. This result topped analysts’ expectations by 5.7%. It was an exceptional quarter as it also put up a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ revenue estimates.

The stock is up 11.7% since reporting and currently trades at $56.28.

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

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

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