Even if they go mostly unnoticed, industrial businesses are the backbone of our country. Still, their generally high capital requirements expose them to the ups and downs of economic cycles, and the market seems to be baking in a prolonged downturn
as the industry has shed 12.1% over the past six months. This drop was worse than the S&P 500’s 2.4% fall.
Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at Textron (NYSE:TXT) and its peers.
After a sharp Tuesday rally fueled by optimism over improved U.S.-EU trade ties, Wall Street stalled midweek as rising Treasury yields reasserted pressure ahead of Nvidia Corp.
Aerospace and defense company HEICO (NSYE:HEI) announced better-than-expected revenue in Q1 CY2025, with sales up 14.9% year on year to $1.10 billion. Its GAAP profit of $1.12 per share was 8.1% above analysts’ consensus estimates.
Wall Street charged higher Tuesday, with U.S. equities posting broad-based gains by midday as investors embraced a risk-on mood, spurred by easing Treasury yields and renewed optimism surrounding trade talks between the U.S. and the European Union.
Growth is oxygen.
But when it evaporates, the consequences can be extreme - ask anyone who bought Cisco in the Dot-Com Bubble (Nvidia?) or newer investors who lived through the 2020 to 2022 COVID cycle.
While profitability is essential, it doesn’t guarantee long-term success.
Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".
