As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the infrastructure distributors industry, including DistributionNOW (NYSE:DNOW) and its peers.
Focusing on narrow product categories that can lead to economies of scale, infrastructure distributors sell essential goods that often enjoy more predictable revenue streams. For example, the ongoing inspection, maintenance, and replacement of pipes and water pumps are critical to a functioning society, rendering them non-discretionary. Lately, innovation to address trends like water conservation has driven incremental sales. But like the broader industrials sector, infrastructure distributors are also at the whim of economic cycles as external factors like interest rates can greatly impact commercial and residential construction projects that drive demand for infrastructure products.
The 4 infrastructure distributors stocks we track reported a slower Q3. As a group, revenues were in line with analysts’ consensus estimates.
Luckily, infrastructure distributors stocks have performed well with share prices up 10.5% on average since the latest earnings results.
Spun off from National Oilwell Varco, DistributionNOW (NYSE:DNOW) provides distribution and supply chain solutions for the energy and industrial end markets.
DistributionNOW reported revenues of $606 million, up 3.1% year on year. This print fell short of analysts’ expectations by 0.5%. Overall, it was a slower quarter for the company with a miss of analysts’ EBITDA and EPS estimates.
Interestingly, the stock is up 7.7% since reporting and currently trades at $14.81.
Read our full report on DistributionNOW here, it’s free.
Formerly a division of industrial distributor HD Supply, Core & Main (NYSE:CNM) is a provider of water, wastewater, and fire protection products and services.
Core & Main reported revenues of $2.04 billion, up 11.5% year on year, outperforming analysts’ expectations by 2.9%. The business had an exceptional quarter with a solid beat of analysts’ organic revenue and adjusted operating income estimates.
Core & Main pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 17.5% since reporting. It currently trades at $56.73.
Is now the time to buy Core & Main? Access our full analysis of the earnings results here, it’s free.
Originally a manufacturing company, Watsco (NYSE:WSO) today only distributes air conditioning, heating, and refrigeration equipment, as well as related parts and supplies.