As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the aerospace industry, including TransDigm (NYSE:TDG) 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 13 aerospace stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.1% 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 average share prices relatively unchanged since the latest earnings results.
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 exceeded analysts’ expectations by 1.9%. Overall, it was a strong quarter for the company with a solid beat of analysts’ organic revenue estimates and a decent beat of analysts’ earnings estimates.
"I am incredibly pleased with the operating results for the third quarter and our continued strong performance," stated Kevin Stein, TransDigm Group's President and Chief Executive Officer.
Interestingly, the stock is up 5.2% since reporting and currently trades at $1,272.
Read why we think that TransDigm is one of the best aerospace stocks, our full report is 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%. It was a strong quarter for the company with an impressive beat of analysts’ earnings estimates.
The market seems happy with the results as the stock is up 8.8% since reporting. It currently trades at $64.52.
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 weak quarter for the company with a miss of analysts’ earnings estimates.
AerSale had the weakest performance against analyst estimates in the group. As expected, the stock is down 7.5% since the results and currently trades at $5.15.
Read our full analysis of AerSale’s results here.
Textron (NYSE:TXT)
Listed on the NYSE in 1947, Textron (NYSE:TXT) provides products and services in the aerospace, defense, industrial, and finance sectors.
Textron reported revenues of $3.53 billion, up 3% year on year, in line with analysts’ expectations. Taking a step back, it was a mixed quarter for the company with a decent beat of analysts’ organic revenue estimates.
The stock is down 4.7% since reporting and currently trades at $87.70.
Read our full, actionable report on Textron here, it’s free.
Hexcel (NYSE:HXL)
Founded shortly after World War II by a group of engineers from UC Berkley, Hexcel (NYSE:HXL) manufactures lightweight composite materials primarily for the aerospace and defense sectors.
Hexcel reported revenues of $500.4 million, up 10.1% year on year, surpassing analysts’ expectations by 3%. Zooming out, it was a mixed quarter for the company with a decent beat of analysts’ earnings estimates but underwhelming earnings guidance for the full year.
The stock is down 7.7% since reporting and currently trades at $62.71.
Read our full, actionable report on Hexcel here, it’s free.
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