As the Q2 earnings season comes to a close, it’s time to take stock of 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 15 aerospace stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 2.7% while next quarter’s revenue guidance was 0.8% below.
In light of this news, share prices of the companies have held steady as they are up 2.3% on average 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 $2.24 billion, up 9.3% year on year. This print fell short of analysts’ expectations by 2.8%. Overall, it was a slower quarter for the company with a miss of analysts’ organic revenue and EPS estimates.
"Our commercial aftermarket and defense markets performed well this quarter, and as expected, growth within the commercial aftermarket continued to moderate. However, sales in the commercial OEM market fell short of our expectations, primarily due to lower than anticipated OEM build rates and inventory destocking," stated Kevin Stein, TransDigm Group's President and Chief Executive Officer.
TransDigm delivered the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 18.1% since reporting and currently trades at $1,318.
Is now the time to buy TransDigm? Access our full analysis of the earnings results here, it’s free.
Best 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 $107.4 million, up 39.3% year on year, outperforming analysts’ expectations by 24.4%. The business had an incredible quarter with a beat of analysts’ EPS and EBITDA estimates.
AerSale delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 34.7% since reporting. It currently trades at $8.31.
Is now the time to buy AerSale? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Astronics (NASDAQ: ATRO)
Integrating power outlets into many Boeing aircraft, Astronics (NASDAQ: ATRO) is a provider of technologies and services to the global aerospace, defense, and electronics industries.
Astronics reported revenues of $204.7 million, up 3.3% year on year, falling short of analysts’ expectations by 1.7%. It was a slower quarter as it posted a significant miss of analysts’ EBITDA estimates.
Interestingly, the stock is up 29.8% since the results and currently trades at $45.90.
Read our full analysis of Astronics’s results here.
Redwire (NYSE: RDW)
Based in Jacksonville, Florida, Redwire (NYSE: RDW) is a provider of systems and components used in space infrastructure.
Redwire reported revenues of $61.76 million, down 20.9% year on year. This number lagged analysts' expectations by 23.3%. It was a slower quarter as it also recorded a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates.
Redwire achieved the highest full-year guidance raise but had the weakest performance against analyst estimates and weakest performance against analyst estimates among its peers. The stock is down 34.7% since reporting and currently trades at $8.94.
Read our full, actionable report on Redwire here, it’s free.
HEICO (NYSE: HEI)
Founded in 1957, HEICO (NYSE: HEI) manufactures and services aerospace and electronic components for commercial aviation, defense, space, and other industries.
HEICO reported revenues of $1.15 billion, up 15.7% year on year. This result beat analysts’ expectations by 3%. Overall, it was an exceptional quarter as it also recorded a solid beat of analysts’ organic revenue estimates and a solid beat of analysts’ adjusted operating income estimates.
The stock is up 5.7% since reporting and currently trades at $322.82.
Read our full, actionable report on HEICO here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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