Specialty Equipment Distributors Stocks Q2 Highlights: Hudson Technologies (NASDAQ:HDSN)

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Specialty Equipment Distributors Stocks Q2 Highlights: Hudson Technologies (NASDAQ:HDSN)

Let’s dig into the relative performance of Hudson Technologies (NASDAQ:HDSN) and its peers as we unravel the now-completed Q2 specialty equipment distributors earnings season.

Historically, specialty equipment distributors have boasted deep selection and expertise in sometimes narrow areas like single-use packaging or unique lighting equipment. Additionally, the industry has evolved to include more automated industrial equipment and machinery over the last decade, driving efficiencies and enabling valuable data collection. Specialty equipment distributors whose offerings keep up with these trends can take share in a still-fragmented market, but like the broader industrials sector, this space is at the whim of economic cycles that impact the capital spending and manufacturing propelling industry volumes.

The 10 specialty equipment distributors stocks we track reported a softer Q2. As a group, revenues missed analysts’ consensus estimates by 1.7%.

The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.

While some specialty equipment distributors stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2% since the latest earnings results.

Slowest Q2: Hudson Technologies (NASDAQ:HDSN)

Founded in 1991, Hudson Technologies (NASDAQ:HDSN) specializes in refrigerant services and solutions, providing refrigerant sales, reclamation, and recycling.

Hudson Technologies reported revenues of $75.28 million, down 16.8% year on year. This print fell short of analysts’ expectations by 4.9%. Overall, it was a disappointing quarter for the company with full-year revenue guidance missing analysts’ expectations and a miss of analysts’ earnings estimates.

Brian F. Coleman, President and Chief Executive Officer of Hudson Technologies commented, “Despite stronger refrigerant sales volume, our second quarter financial performance reflected the continued headwinds of pricing pressure for certain refrigerants combined with lower activity levels from our DLA contract as compared to last year.

Hudson Technologies Total Revenue
Hudson Technologies Total Revenue

Hudson Technologies delivered the weakest full-year guidance update of the whole group. Interestingly, the stock is up 8.8% since reporting and currently trades at $8.19.

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