What Happened?
Shares of engineered products manufacturer ESCO (NYSE:ESE) jumped 2.3% in the afternoon session after the company reported strong third-quarter results that surpassed analyst expectations and provided an optimistic forecast for the upcoming year.
For the quarter, ESCO announced revenue of $352.7 million and adjusted earnings of $2.32 per share, beating analyst estimates on both metrics. This performance marked an 18.1% increase in sales and a nearly 59% rise in adjusted earnings compared to the same period last year. The strong results were underscored by a 29% year-over-year increase in the company's backlog, signaling robust demand. Looking ahead, the company issued an upbeat forecast, with its adjusted earnings guidance of $7.65 per share at the midpoint for the upcoming fiscal year coming in 5.4% ahead of consensus estimates.
The shares closed the day at $215.42, up 2.5% from previous close.
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What Is The Market Telling Us
ESCO’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 2.6% on the news that markets faded the Nvidia rally in the morning session, as investors remained uncertain about future rate cuts.
While the trading day began with significant enthusiasm, pushing the Dow Jones Industrial Average up more than 700 points and the Nasdaq Composite up 2.6%, momentum quickly evaporated as the session wore on. The primary catalyst for this sharp reversal was a stronger-than-expected jobs report, which reduced the implied odds of a December interest rate cut to less than 40%. This macroeconomic anxiety overshadowed stellar corporate performance. Nvidia initially surged 5% on blockbuster earnings and CEO Jensen Huang's bullish outlook on "off the charts" demand for Blackwell chips. However, the stock eventually turned negative, acting as a heavy weight that dragged the broader indices into the red. The sell-off partly reflects a deepening caution regarding high-flying tech valuations in a "higher-for-longer" rate environment. Consequently, investors appeared to rotate capital away from volatile growth sectors and toward defensive staples, evidenced by Walmart's 6% gain following its own earnings beat. Ultimately, the market could not sustain the morning's euphoria, as traders prioritized rate realities over AI potential.
ESCO is up 65.4% since the beginning of the year, and at $217.50 per share, it is trading close to its 52-week high of $222.40 from November 2025. Investors who bought $1,000 worth of ESCO’s shares 5 years ago would now be looking at an investment worth $2,187.
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