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This Week in Earnings – Q3'25

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Our thought leadership this week addresses:
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Our thought leadership this week addresses:

Key Events

U.S. Government Shutdown

  • As the government shutdown extends into its fourth week, conditions are becoming increasingly serious, with at least 25 states expected to cut SNAP benefits on Nov. 1 – one of many federal programs affected by the shutdown – leaving millions of Americans at risk of losing access to food assistance. (Source: Politico)
  • The Federal Reserve will hold its next FOMC meeting on October 28–29, where policymakers are expected to decide on potential rate cuts despite the limited economic data available due to the ongoing government shutdown. (Source: WSJ)

Inflation

  • The U.S. Consumer Price Index rose 0.3% in September, following a 0.4% gain in August, bringing the YoY increase to 3.0%. The reading came in lower than forecasts of 3.1% but remains above the Fed’s target of 2%. Core CPI, which excludes food and energy, also rose 0.2% in September and 3.0% annually. The increase was driven largely by higher gasoline prices, up 4.1% in September, while food prices rose modestly by 0.2%. Worries exist that Tariffs could cause another round of inflation. (Source: Bureau of Labor Statistics)
  • Canada’s Consumer Price Index rose 2.4% YoY in September, ahead of 2.3% consensus and up from August’s 1.9% increase. Core CPI, which excludes the eight most volatile components, rose 2.8% YoY from August’s 2.6% reading. Economists have noted the Bank of Canada has shifted its focus to growth and employment over inflation risks, with the BoC still widely expected to cut rates by 25 bps to 2.25% at next week’s policy meeting. (Source: Statistics Canada)

Geopolitics

  • The U.S. Treasury’s OFAC announced new sanctions on major Russian oil companies Wednesday in response to Russia’s failure to engage in the Ukraine peace process, pushing oil prices roughly 5% higher on Thursday. (Source: U.S. Dept of Treasury, Reuters)
  • President Donald Trump and Australian Prime Minister Anthony Albanese signed a critical minerals agreement at the White House on Monday, as the U.S. looks to strengthen access to Australia’s vast rare-earth resources amid China’s tighter export controls on its own supplies. (Source: AP News)
  • President Trump is scheduled to meet with Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation (APEC) Summit in South Korea on October 30, where the two leaders are expected to discuss a broad range of issues, including trade and nuclear power. (Source: Reuters)

S&P 500 Earnings Snap

29% of the S&P 500 has reported earnings to date

Q3'25 Revenue Performance

  • 82% have reported a positive revenue surprise, above both the 1-year average (62%) and 5-year average (70%).
  • Blended revenue growth (combines actual reported results for companies and estimated results for companies yet to report) is 6.7%; this compares to Q2’s 6.4% blended revenue growth.
  • Companies are reporting revenue 2.4% above consensus estimates, well above the 1-year average (+0.9%) and above the 5-year average (+2.1%).
Chart: S&P 500 Q3'25 Blended (Reported & Estimated) Revenue Growth
Source: Corbin Advisors

Q3’25 EPS Performance

  • 87% have reported a positive EPS surprise, above both the 1-year average (77%) and the 5-year average (78%).
  • Blended earnings growth (combines actual reported results for companies and estimated results for companies yet to report) is 10.4%; this compares to Q2’s 13.8% blended earnings growth.
  • Companies are reporting earnings 8.2% above consensus estimates, above the 1-year average (+6.3%) and below the 5-year average (+9.1%)
Chart: S&P 500 Q3'25 Blended (Reported & Estimated) Earnings Growth
Source: Corbin Advisors

Select Insights

Inside The Buy-Side® Q3’25 Industrial Sentiment Survey®

Following last quarter’s survey, which found a rebound in industrial investor bullishness back near levels seen at the start of the year, this quarter’s Industrial Sentiment Survey® reveals sustained optimism around secular tailwinds and potential for a cyclical turnaround. However, outright optimism is curbed by continued uncertainty.

Insights are based on responses from 30 sector-dedicated participants globally, from September 12th to October 9th, 2025, comprising 63% buy side and 37% sell side, and equity assets under management totaling ~$850 billion, including ~$118 billion invested in Industrials.

Investor Sentiment and Perceived Executive Tone Build on Last Quarter’s Rebound with Expectations for Solid, In-line Q3 Results and Full Year Guidance Reiterations

  • 54% of investors characterize sentiment as Bullish or Neutral to Bullish, little changed QoQ, but outright Bullish views more than halve; Bearish or Neutral to Bearish sentiment increases modestly
    • Investors point to secular tailwinds concentrated within AI, data centers, and A&D, but cite potential for a broad-based cyclical turnaround; concerns with tariffs, a weakening consumer, and to a lesser extent valuations, stymie outright optimism
  • 61% describe executive tone as Neutral to Bullish,
    the most upbeat since Q1’24, albeit with no outright compared with 9% last quarter; those hearing a Bearish or Neutral to Bearish tenor edges lower to just 17%
  • A majority, 57%, expect Q3 earnings to be In Line with consensus, up from 45% QoQ, while those expecting beats falls to 29% from last quarter’s 45% reading amid consensus increases coming out of Q2
  • Similarly, 50% anticipate Stable sequential KPI performance, with a sharp pullback in those expecting EPS to Worsen; Margins continue to stand out with the lowest share expecting profitability to Improve QoQ
  • A solid majority anticipate companies will Maintain annual guides, with notably fewer expecting Revenue and EPS outlooks to be Lowered

Despite Lingering Trade Uncertainty and a “Mixed Bag” Across End Markets, Higher Conviction in YoY Industrial Organic Expansion and Optimism for 2026 Supports Investor Mindset Shift to Growth

  • 58% now anticipate YoY industrial organic growth with only 16% expecting it to be lower; further, those citing Economic Slowdown as a concern is notably lower QoQ
  • Investors are prioritizing Growth over Margins – 64% to 36% – a big swing from the prior two quarters that saw roughly two-thirds favoring margins and the highest reading for growth since 72% in Q4’24
    • 38% expect OBBBA legislation to have a Positive impact on financial performance for the sector over the next six months, though an equal share report being Unsure
  • Growth/Demand jumps ahead of Tariffs as the leading topic for upcoming earnings calls, though interest in the latter remains high; relatedly, those seeking commentary on Costs/Inflation triples QoQ
  • Curbing exuberance…
    • 59% expect peak tariff impacts to be felt within the next six months, while another third expect landfall within 12 months
    • 68% observed evidence of pull-forward demand in 1H’25, and while views are mixed on whether it will have a negative impact on future financial performance, a slight majority, 53%, believe this outcome is likely

Capital Preferences Shift Toward Reinvestment Over Deleveraging, Reflecting Renewed Growth Focus; Most Industries See Fewer Bears, But Defense and Water Remain Clear Bright Spots, as Ag Sputters

  • Reinvestment jumps ahead of Debt Paydown as the preferred cash use, rising to 64% from 46%, the highest level since Dec. ‘24
    • Interest in Share Buybacks holds strong near last quarter’s 5-year high despite valuation concerns, edging down 2 points to 36%
    • Support for M&A rises to 21% from 16%, while preferences for Dry Powder and Dividend Growth both recede QoQ
  • Defense remains the most favored sub-sector, with bullish sentiment at 82%, though Water closes the gap with an influx of bulls; meanwhile, beleaguered Transportation and Resi Construction both see improvement QoQ
  • Conversely, investors flip net-bearish on Agriculture, while Machinery and Building Products also see upticks in bearish sentiment; views toward Autos and Non-resi Construction remain deeply negative
Corbin Advisors Inside The Buy-Side® Industrial Sentiment Survey® Q3'25 Cover

The Sector Beat: Industrials

Industrial Guidance: Initial Trends

At the beginning of each quarter, we analyze annual guidance trends for U.S. Industrial companies with market caps greater than $1B that have reported to date. Below are our findings. For comparison purposes, we provide an “All Company” benchmark, which tracks a basket of U.S. companies1 across all sectors that have reported earnings to date (n = 162).2

Guidance Breakdown by Industry

Industry Number of Companies
Aerospace & Defense 7
Building Products 4
Machinery 4
Passenger Airlines 3
Trading Companies & Distributors 3
Commercial Services & Supplies 2
Electrical Equipment 2
Industrial Conglomerates 2
Construction & Engineering 1
Ground Transportation 1
Total 29

Source: Corbin Advisors

Revenue Guidance 

To date, mixed guidance updates have been reported by Industrials, with 41% having Lowered annual revenue guidance, triple the percentage of companies at this point in the earnings cycle last year and higher than the All Company benchmark. Companies lowering guidance cite tariff impacts and macro uncertainty. Just over one-quarter, 27%, have Raised annual revenue guidance and just under one-third, 32%, are Maintaining. While it is still early in the earnings season, 64% of investors surveyed as part of our Inside The Buy-Side® Industrial Sentiment Survey® were expecting companies to maintain guides, with only 14% anticipating top-line guidance reductions.

Chart: Annual Revenue Guidance Trends
Source: Corbin Advisors
  • Companies that Lowered guidance (n = 9)
    • 56% of companies lowered the top and bottom of the original range, with all but one of the remainder lowering just the top end of the range while maintaining the bottom
    • Average midpoint of 1.2% growth versus 2.5% last quarter
    • Average spread decreased by 180 bps to 0.6%
  • Companies that Maintained guidance (n = 7)
    • Average midpoint of 4.3% growth
    • Average spread of 8%
  • Companies that Raised guidance (n = 6)
    • Average midpoint of 5.3% growth versus 4.4% last quarter
    • Average spread decreased by 80 bps to 1.2%
  • Overall midpoints assume 3.2% annual growth vs. 3.5% analyst estimates, on average

Annual Revenue Guidance Summary

Table: Annual Revenue Guidance Summary

ABM, AAL, DAL, GATX, GE, TXT, and UAL did not provide annual revenue guidance

*Outliers that have not been included in averages

EPS Guidance

More than half of Industrial companies Raised annual EPS guides, in line with the broader All Company benchmark. Still, one-quarter Lowered guides amid macro uncertainty, while 17% Maintained. Similarly, our Inside The Buy-Side® Industrial Sentiment Survey® found the majority, 58%, expecting companies to maintain EPS guidance, with just 21% expecting increases.

Chart: Annual EPS Guidance Trends
Source: Corbin Advisors
  • Companies that Lowered guidance (n = 6)
    • 50% lowered the top and bottom of the original range
    • Average spread decreased from $0.39 to $0.18
  • Companies that Maintained guidance (n = 4)
    • Average spread of $0.78
  • Companies that Raised guidance (n = 13)

Annual Adj. EPS Guidance Summary

Table: Annual Adj. EPS Guidance Summary

CNM, GEV, NX, REVG, URI did not provide annual EPS guidance

Industrial Earnings Call Analysis Summary

In addition, we analyzed this group’s earnings reports and the broader industrial universe to identify key themes emerging this quarter.

As Q3 earnings season progresses, the Industrial landscape continues to reflect a stable but mixed operating environment, in line with the diverse nature of the sector and consistent with findings from our recently published Q3’25 Industrial Sentiment Survey®.

Macro commentary points to a modestly improving backdrop with emerging tailwinds, though demand remains inconsistent and executives continue to balance optimism with caution. Defense, AI/data center, and utility-linked segments stand out as clear bright spots, supported by sustained investment and secular growth trends, while airlines note an acceleration in business travel demand. Conversely, transportation, general industrial, and consumer-facing categories remain sluggish, with a sharper focus on cost control and operational discipline over volume-driven growth.

Tariffs remain a central theme, with several companies citing rising margin pressures and the potential for peak impacts on the horizon. Firms continue to cite effective mitigation strategies through supply chain adjustments and pricing actions, though input cost pressures are still evident. Those benefiting from strong demand underscore their ability to pass on higher prices as a key lever to offset the impact of rising input costs.

On the policy front, OBBBA-related tax and R&D incentives are viewed as supportive, though discussion has shifted toward the potential impact from the U.S. government shutdown. To date, companies report limited direct effects but acknowledge potential headwinds if a near-term resolution fails to materialize.

Globally, executives present mixed views. Trends in Europe mirror the U.S. — bifurcated by strong demand for commercial projects amid softer consumer demand — while China and Brazil are mixed, and India infrastructure activity remains solid.

Overall, the tone this quarter remains measured. Momentum and visibility have improved in select segments, yet persistent macro uncertainty and divergent end market trends continue to define the industrial outlook heading into year end.

Key Industrial Earnings Themes

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Macro & Outlook

Uneven Environment with Signs of Stabilization and Emerging Tailwinds Alongside Continued Broader Industrial Softness and Lingering Macro Uncertainty; Some Signal Greater Potential for Tailwinds in 2026

  • GE Aerospace ($321.0B, Aerospace & Defense): “As we think about 2026, especially on the commercial side, the environment today feels better than where we were three months ago. Air traffic growth has stabilized. But the more important part is the basic algorithm has not changed. The installed base is growing, and the number of engines that need a shop visit is projected to be up double-digits in 2026, and that will add to the demand that’s out there. And then on the new equipment business, the backlog is very strong. We’re optimistic as we look at 2026. We’re more or less in line with the 2028 framework we talked about in July, with a lot of good tailwinds in terms of the demand environment, and clearly operational momentum building.”
  • 3M ($88.5B, Industrial Conglomerates): “The 3M team delivered another strong quarter in Q3 against a macro backdrop that is largely unchanged and generally soft.”
  • CSX ($66.5B, Ground Transportation): “Looking across the markets we serve, business conditions are mixed. Customers face uncertainty and headwinds from shifting trade policies, weak global commodity prices, unsupportive interest rates, and a persistently soft trucking market.”
  • Fastenal ($49.7B, Trading Companies & Distributors): “The industrial economy remains sluggish, essentially flat. PMI averaged about 48.6 in the quarter, which indicates contraction. Our growth is mostly self-help and market share gains rather than any particular macro lift.”
  • Delta Air Lines ($40.3B, Passenger Airlines): “The environment continues to improve. Over the past six weeks, sales trends have accelerated across all geographies and in every advanced purchase window.”
  • Westinghouse Air Brake Technologies ($33.5B, Machinery): “While key metrics across our Freight business remained mixed, we are encouraged by the underlying momentum of our business and the continued strength of our pipeline of opportunities across the globe. Despite the strong momentum that we’re experiencing, we’re continuing to exercise caution to navigate a volatile and uncertain economic landscape as we move into the final quarter of the year.”
  • Lennox International ($19.3B, Building Products): “The environment has been tough with destocking, higher interest rates, and shifting consumer patterns, all of which have weighed on our results. However, I am confident that these headwinds are temporary. Looking ahead to 2026, we expect channel inventory to normalize. With the prospect of lower interest rates, both new and existing home sales should begin to recover. We are also moving past the disruption of this year’s refrigerant transition. We expect dealers to regain confidence as the transition-related component shortages are finally in the rearview. Of course, we are mindful of some headwinds. As economic pressures persist, we anticipate higher demand for value-tiered products, along with elevated repair activity in lieu of system replacements.”
  • Pentair ($17.9B, Machinery): “We do feel like we have some tailwinds coming into 2026. The businesses are performing well and we have some top-line momentum in the back half that that could carry forward into the new year. We’ve got the price carryover. We’ve got market recoveries that we’re slowly starting to see from a relatively low starting point in many of our businesses. We also have to be cautious in terms of potential headwinds. Tariffs still create uncertainty for us. Interest rates are remaining high. A generally [soft] sentiment with end consumers, whether it’s home sales or eating out with the families. Our goal has been to build a plan around lower top-line growth and lean in on transformation. And then, if markets do recover more than what we had planned, we’ll capture that upside.”

Sector Remains a “Mixed Bag”; Strength in Defense, AI/Data-centers, Utilities, and Travel, Offset by “Sluggish” End Markets Elsewhere

  • 3M ($88.5B, Industrial Conglomerates): “Macro trends remained soft and largely unchanged from Q2. But due to our strong execution, we are outperforming. In Q2, we said general, industrial, and safety will improve off its low single-digit growth in the first half, and that is what happened despite a surprisingly weak roofing granules market.”
  • Northrop Grumman ($85.6B, Aerospace & Defense): “Our allies are committed to modernizing their armed forces and investing in deterrent capabilities, and the current geopolitical environment has increased the urgency for them to act now. This is being reflected in a significant increase in defense spending that is expected to carry well into the next decade.”
  • Vertiv Holdings ($66.8B, Electrical Equipment): “The data center market continues to show remarkable strength, driven by accelerating AI adoption Our order pipeline and market indicators give us confidence in this trajectory. Based on our substantial backlog and clear visibility of pipeline, we anticipate continued significant organic sales growth in 2026.”
  • CSX ($66.5B, Ground Transportation): “It’s a mixed bag. We’ve had a few closures on us, concentrated in the forest products I do think, that market, with a little bit of bump from the economy, could come back for us. Some of these markets are very low in terms of the cycle. Chemicals has been one of those that we’ve highlighted all year long that has faced a lot of pressure from tariffs and other things. More certainty around where everything lands in terms of what the tariffs look like will create some certainty around investments that will be helpful to our business. I’m not here to call the cycle. We had one of our customers talk about trucking capacity starting to come out. That’s good to hear. We’ll see if that materializes in the next year. We’ve been in probably the longest downcycle that all of us have seen in a long, long time.”
  • JB Hunt ($16.1B, Ground Transportation): “As we said last quarter, business conditions in our end markets remain challenged with soft demand for furniture, exercise equipment, and appliances. We continue to see positive demand in our fulfillment network driven by off-price retail. Going forward, we expect market conditions to remain challenged through at least year end.”
  • Fastenal ($49.7B, Trading Companies & Distributors): “Sales in Q3 [represented] our strongest quarterly daily sales rate since Q1 of 2023. Despite sluggish end market demand and caution related to trade policy and tariffs, margin pressures, government shutdowns, and the potential for longer-than-normal holiday shutdowns in Q4 due to Christmas falling in the middle of the week, regional and other sales leadership expectations are generally favorable for continued strong growth due to share gains.”
  • Delta Air Lines ($40.3B, Passenger Airlines): “Since July, travel demand has strengthened, led by a rebound in business travel. The S. economy remains on solid footing, and our customer base is financially strong, with rising preference for premium products and services. Consumer spending on the Delta Amex co-brand card is up double digits YTD, with a recent acceleration in travel and entertainment that mirrors the improvement that we’re seeing in bookings. Premium revenue growth remains robust, and main cabin trends are improving. Our exposure to the higher household income cohort has enhanced our relative position versus carriers that are catering to a more stressed lower- to middle-income environment.”
  • United Airlines ($32.4B, Passenger Airlines): “We had the company’s all-time highest business revenue ticketing during the week ending October 5. Of the top five best weeks in our history, three of the remaining four occurred in September 2025. Leisure demand is also healthy as we head into Q4. We saw bookings inflect positive in early July, and industry revenues are expected to be positive YoY for all remaining months of 2025.”
  • Snap-on ($18.0B, Machinery): “It seems to most people like the tariffs have settled down since Liberation Day. But Canada, Mexico, China, three of the top four sourcing partners for manufacturers in the U.S. for general industry, they’re still unsettled. You just saw China just got threatened with another 100%, so those people in that sector are much tighter and keeping their powder dry. If you’re looking at other places like aviation, those things are pretty good. So that’s what’s happening in the big ticket items in the U.S.”
  • Valmont Industries ($8.2B, Construction & Engineering): “We’re seeing strong demand across the board.On all product lines – transmission, distribution substations, large projects, smaller projects. All these megatrends are real, if you look at electrification, AI, grid connectivity, resiliency, the load growth. Of course, AI and data centers are a key driver and a large consumer of energy. All of our customers are showing extremely strong demand, and our backlog is well into 2026. It’s not one single driver and it’s not one single customer. It’s very broad. We are very excited about where the utility space is today.”

Margin Headwinds Mounting but Expected to Peak Soon; Companies Continue to Lean on Supply Chain and Pricing Actions 

  • RTX ($215.1B, Aerospace & Defense): “During the quarter, Collins saw about $90M of headwind from YoY tariffs. A number of mitigations have been identified, but that’s the key driver dragging down the margins. We continue to do a lot of work to support our products and qualification for USMCA treatment. So, there’s an opportunity to mitigate the headwinds, but that’s what you saw in Q3 and you’ll see that again in Q4.”
  • Vertiv Holdings ($66.8B, Electrical Equipment): “When we talk about tariffs, we view them as another input cost to our business. The situation remains fluid and we’re addressing it with comprehensive mitigation actions and pricing programs. We expect to materially offset current tariff impacts as we exit Q1 2026 while optimizing our supply chain and manufacturing footprint. We are accelerating manufacturing and service capacity investments across all regions, particularly in the Americas, while maintaining disciplined, fixed cost management.”
  • PACCAR ($51.2B, Machinery): “Margins were affected by the August steel and aluminum tariff increases, and the tariff costs on trucks that were built in the U.S.Looking ahead, Q4 margins could be around 12% as tariffs peak in October. However, the new Section 232 on medium and heavy trucks that will become effective November 1 will be good for PACCAR’s customers as it will reduce tariff costs and bring clarity to the market. PACCAR’s proud to produce over 90% of its U.S.-sold trucks in Texas, Ohio, and Washington. Tariff costs will begin to reduce as we head towards the end of the year.”
  • Fastenal ($49.7B, Trading Companies & Distributors): “We could get a little margin squeeze in the Q4 because costs are continuing to rise. We’re going to work to avoid it like ever, but we think the number is a little bit lower. Most of that is because we have better information now than we did three months ago.“
  • Westinghouse Air Brake Technologies ($33.5B, Machinery): “I don’t think we’ve seen the largest gross or net impact on tariffs. I think that’s still in front of us over the next couple of quarters. That’s why we’re continuing to work a lot of our cost-out plans, a lot of the elements in terms of supplier mitigation. And make no mistake, pricing is a key element of that, too.”
  • Pentair ($17.9B, Machinery): “We continue to execute well and are offsetting the impact of tariffs through increased prices and other mitigation strategies. Our total 2025 tariff impact remains consistent with our outlook in Q2, but tariff uncertainty continues. Our 2025 guidance does not include further China and Mexico impact, which could go into effect later this year. However, these are expected to be immaterial for this year. We expect to take mitigating actions as needed to offset these additional tariffs if they occur.”
  • UniFirst ($3.2B, Commercial Services & Supplies): “Looking ahead, we expect the influence of tariffs will impact our short- to medium-term profitability. Through the end of fiscal 2025, newly imposed tariffs have not had a significant impact on our results, primarily because goods procured at higher costs require time to move through our supply chain. We believe we are better positioned to navigate the evolving trade situation with our efforts over the last several years to improve the diversification within our supply chain. However, the situation remains dynamic. Depending on how the situations evolve, the impact of tariffs on fiscal 2026 could escalate from our current estimates.”

Amid Rising Input Costs, Firms Pass Through Price Increases Where Demand Allows 

  • RTX ($215.1B, Aerospace & Defense): “On pricing for both Pratt and Collins, given what’s going on in terms of tariffs and the demand in the marketplace, I think both have been appropriately aggressive in pricing this year. As we look towards next year, we’ve got to see how things shake out on the tariff front, but we’re going to continue to be aggressive in terms of catalog pricing because of the value that we bring and because of the demand that’s out there.”
  • Fastenal ($49.7B, Trading Companies & Distributors): “The pricing outlook warrants some discussion. Year-to-date, significant tariffs have been applied to products from China, as well as steel. We continue our long-term trend of diversifying our supply chain where possible to the size and timing of our suppliers’ pricing actions. That said, supply chains have gotten more expensive, and part of our response over time has been incremental pricing. We have been proactively engaging with our customers for several months. Additional pricing actions will be necessary in Q4.”
  • JB Hunt ($16.1B, Ground Transportation): “While inflation and insurance, wages and employee benefits, and equipment cost were all up, our productivity and cost management efforts more than offset those headwinds to drive our improved results.”
  • Valmont Industries ($8.2B, Construction & Engineering): “The [favorable] pricing in this quarter, is mostly because in the beginning of the year, with our tariff mitigation plans, we passed it on in pricing and there’s a delay from when you bid and when these products ship. So we’re seeing part of that. Going forward, that will continue. The bid market is very strong. The demand/supply remains tight. We are quoting very healthy margins and winning projects. So, the pricing outlook remains strong for the foreseeable future.”

OBBBA Tailwinds Persist, but Heightened Shutdown Uncertainty Clouds Outlook 

  • Lockheed Martin ($112.6B, Aerospace & Defense): “We’re all watching Congress work through the FY 2026 appropriation bills and the government shutdown. We continue to see broad support through all of this for national defense priorities given the unsettled geopolitical situation. Lower cash tax payments also helped as we roll through the OBBBA impacts.”
  • Northrop Grumman ($85.6B, Aerospace & Defense): “We are certainly seeing in recent weeks the government shutdown having some impact on the government’s ability to move quickly to make decisions and have the right resources available. So we’re all hopeful that the shutdown can come to a quick resolution and that we can resume work on some of these important decisions that would open up the spend plans and awards that will come from the government. Assuming it is [resolved in the near term], we do not anticipate any significant impact on our financial results.”
  • PACCAR ($51.2B, Machinery): “We believe that the Big Beautiful Bill, as we said in Q3, is going to provide incentives, and we have programs around encouraging our customers to take advantage of that, 100% bonus depreciation. We think that will help spur some demand here in Q4.”
  • Delta Air Lines ($40.3B, Passenger Airlines): “While we are monitoring potential impacts from the U.S. government shutdown, we have not seen a material effect to date.”
  • Snap-on ($18.0B, Machinery): “Sales for the U.S. military were down YoY. However, order activity has been increasing despite the uncertain timing of funding for some government related projects.”
  • American Airlines ($8.0B, Passenger Airlines): “I’ve been in constant contact with Secretary Duffy about the impact of the government shutdown and doing everything we can to mitigate. And from that respect, a huge shout-out to TSA, CBP, our air traffic controllers. For the most part, they’ve been keeping the air system running and airports running fairly well. In terms of the business impact, government travel, it’s important to us, but it’s something that is certainly less than $1 million a day in terms of revenue. So the impact, while it’s there, is something that I’m quite confident when the government reopens, there’s going to be some pent-up demand.And hopefully, we get back on track pretty quick.”
  • MSC Industrial Direct Co ($4.8B, Trading Companies & Distributors): “We’ve seen some softening now with the shutdown that will have a small positive mix effect. We don’t expect that to be more than about 10 bps on our margin. And the outlook that we gave really is predicated on both ends of the scenario – the high end of our growth range if the shutdown ends, and the low end of our growth rate if the shutdown continues to the end of the quarter.”

Europe Mirrors U.S. with Project Strength But Softer Consumer Demand; China and Brazil Mixed, India Steady 

  • 3M ($88.5B, Industrial Conglomerates): “China is interesting. Q3 was up high single-digits, better than we had expected. We had expected a softening in the back half, and in fact it accelerated a little bit in Q3. Now, it could weaken in Q4 but still be up. So we’re very encouraged with the trends. China continues to be pretty resilient in lots of ways, but there’s a lot of self-help that’s going on. We changed our organizational model in China as well as in India. And we’re seeing better performance because we’re driving operational excellence a whole lot better than we might have done in the past. So, part of the growth that we’re seeing in China is self-help.“
  • Westinghouse Air Brake Technologies ($33.5B, Machinery): “Internationally, activity is strong across core markets such as Asia, India, Brazil, and CIS. Significant investments to expand and upgrade infrastructure are supporting a robust international locomotive backlog and orders pipeline.”
  • Pentair ($17.9B, Machinery): “In North America, we continue to do extremely well against the market backdrop. But we do have international sales and we’ve seen some softness in 2025 with some of the sales into China…that’ll level off as we look at next year. We’re encouraged by some of the recent volume trends that we’re seeing in North America.”
  • Snap-on ($18.0B, Machinery): “The grass roots in Europe have displayed the same kind of uncertainty or reticence that you see in the U.S. So, you see a bifurcation in Europe where the transactional business with individuals is kind of flattish, not so strong. But there’s hay to be made in projects, which is part of the success of critical industries in this quarter. [In Europe], there’s not so much to worry about with tariffs, so projects are good business in Europe these days.”
  • Valmont Industries ($8.2B, Construction & Engineering): “ In North America, grower sentiment remains soft as expected record corn and soybean yields weigh on prices. In Brazil, the environment has turned more cautious.Growers are facing tighter credit. Slower release of government financing and ongoing trade uncertainty, leading many to delay large capital purchases. These near-term pressures are part of the normal cycle following several strong years of farm profitability and investment.”
  • Honeywell International (Industrial Conglomerates, $131.2B): “We have growth across all parts of the world. That’s not happened for a while. We have solid growth in the U.S., Europe is performing more like low-single-digit to mid-single depending on the business. So Europe is returning to reasonable growth. Middle East, India does always very well for Honeywell. And China is more flattish, less Aero, but if you add Aero, we’re in high single.”
  • Graco (5B, Machinery): “China has actually held up pretty well for us this year, which after a couple of years of declines there was – it’s been nice to see. It really depends on the end market that you’re in. The mining industry in particular in Asia Pacific maybe to a lesser extent, China has held up pretty well. Some of the traditional industrial markets, including adhesives, sealants and liquid finishing and the powder business have actually held up pretty well in China. China has been a positive surprise maybe for us after a couple of years of tough business over there.”

In Closing

As we noted in our Inside The Buy-Side® Industrial Sentiment Survey®, the backdrop heading into Q3 earnings was a “mixed bag”. Results for the Industrial sector, so far, underscore a landscape of cautious optimism, with companies navigating a complex mix of pockets of strength and emerging tailwinds. While demand remains uneven, the resilience across key industries — particularly in defense, AI/data center, utilities, and travel — has provided a stabilizing anchor amid broader softness. The focus on operational discipline, pricing agility, and supply chain adaptability continues to define successful execution in a still-fragmented demand environment.

Looking ahead, sentiment suggests the sector may be approaching an inflection point as the broader macro backdrop shows early signs of improvement with policy tailwinds persisting into 2026.

We will continue to highlight developing themes in our ongoing weekly earnings Sector Beat coverage to provide insightful information on the macroeconomic landscape and factors impacting market sentiment.

  1. $1B in market cap
  2. As of 11am ET 10/23/25
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