Wrapping up Q2 earnings, we look at the numbers and key takeaways for the aerospace stocks, including AAR (NYSE:AIR) and its peers.
Aerospace companies often possess technical expertise and have made significant capital investments to produce complex products. It is an industry where innovation is important, and lately, emissions and automation are in focus, so companies that boast advances in these areas can take market share. On the other hand, demand for aerospace products can ebb and flow with economic cycles and geopolitical tensions, which can be particularly painful for companies with high fixed costs.
The 14 aerospace stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was in line.
Stocks--especially those trading at higher multiples--had a strong end of 2023, but this year has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts. However, aerospace stocks have held steady amidst all this with share prices up 4.2% on average since the latest earnings results.
AAR (NYSE:AIR)
The first third-party MRO approved by the FAA for Safety Management System Requirements, AAR (NYSE:AIR) is a provider of aircraft maintenance services
AAR reported revenues of $656.5 million, up 18.7% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with a solid beat of analysts’ operating margin estimates.
"We delivered another record quarter driven by both record performance in our new parts distribution activities and the Triumph Product Support acquisition, which exceeded our expectations during the period. We also continued to drive growth in our heavy maintenance hangars out of our existing footprint. In addition to this record performance in our commercial business, we saw double-digit growth in our government business," said John M. Holmes, Chairman, President and Chief Executive Officer of AAR CORP.
Unsurprisingly, the stock is down 8.2% since reporting and currently trades at $67.25.
Is now the time to buy AAR? Access our full analysis of the earnings results here, it’s free.
Best Q2: Ducommun (NYSE:DCO)
California’s oldest company, Ducommun (NYSE:DCO) is a provider of engineering and manufacturing services for high-performance products primarily within the aerospace and defense industries.
Ducommun reported revenues of $197 million, up 5.2% year on year, outperforming analysts’ expectations by 1.1%. The business had an exceptional quarter with an impressive beat of analysts’ earnings and operating margin estimates.
The market seems happy with the results as the stock is up 8.7% since reporting. It currently trades at $64.45.
Is now the time to buy Ducommun? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: AerSale (NASDAQ:ASLE)
Providing a one-stop shop that integrates multiple services and product offerings, AerSale (NASDAQ:ASLE) delivers full-service support to mid-life commercial aircraft.
AerSale reported revenues of $77.1 million, up 11.2% year on year, falling short of analysts’ expectations by 12.7%. It was a disappointing quarter as it posted a miss of analysts’ operating margin and earnings estimates.
AerSale delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 7.4% since the results and currently trades at $5.16.
Read our full analysis of AerSale’s results here.
TransDigm (NYSE:TDG)
Supplying parts for nearly all aircraft currently in service, TransDigm (NYSE:TDG) develops and manufactures components and systems for military and commercial aviation.
TransDigm reported revenues of $2.05 billion, up 17.3% year on year. This print beat analysts’ expectations by 1.9%. Overall, it was a very strong quarter as it also produced an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ organic revenue estimates.
The stock is up 13.5% since reporting and currently trades at $1,373.
Read our full, actionable report on TransDigm here, it’s free.
Howmet (NYSE:HWM)
Inventing the first forged aluminum truck wheel, Howmet (NYSE:HWM) specializes in lightweight metals engineering and manufacturing multi-material components used in vehicles.
Howmet reported revenues of $1.88 billion, up 14.1% year on year. This number surpassed analysts’ expectations by 2.5%. Overall, it was a very strong quarter as it also produced an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ Fastening systems revenue estimates.
The stock is up 14.7% since reporting and currently trades at $95.05.
Read our full, actionable report on Howmet here, it’s free.
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