Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at Cadre (NYSE: CDRE) and its peers.
Emissions and automation are important in aerospace, so companies that boast advances in these areas can take market share. On the defense side, geopolitical tensions–whether it be Russia’s invasion of Ukraine or China’s aggression toward Taiwan–have highlighted the need for consistent or even elevated defense spending. As for challenges, demand for aerospace and defense products can ebb and flow with economic cycles and national defense budgets, which are unpredictable and particularly painful for companies with high fixed costs.
The 32 aerospace and defense stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 3% while next quarter’s revenue guidance was 0.7% below.
Thankfully, share prices of the companies have been resilient as they are up 8.8% on average since the latest earnings results.
Cadre (NYSE: CDRE)
Originally known as Safariland, Cadre (NYSE: CDRE) specializes in manufacturing and distributing safety and survivability equipment for first responders.
Cadre reported revenues of $157.1 million, up 8.9% year on year. This print exceeded analysts’ expectations by 3.3%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ adjusted operating income estimates.
“We delivered strong revenue growth and profitability in the second quarter, despite a fluid macro environment, which underscores the positive demand trends we continue to see for Cadre’s best-in-class safety products across our law enforcement, first responder, military and nuclear categories,” said Warren Kanders, CEO and Chairman.
Interestingly, the stock is up 4.2% since reporting and currently trades at $36.09.
Read our full report on Cadre 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 estimates and an impressive beat of analysts’ EBITDA estimates.
AerSale scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 29.3% since reporting. It currently trades at $7.98.
Is now the time to buy AerSale? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Lockheed Martin (NYSE: LMT)
Headquartered in Maryland, Famous for the F-35 aircraft, Lockheed Martin (NYSE: LMT) specializes in defense, space, homeland security, and information technology products.
Lockheed Martin reported revenues of $18.16 billion, flat year on year, falling short of analysts’ expectations by 2.3%. It was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations and a significant miss of analysts’ adjusted operating income estimates.
Interestingly, the stock is up 8.2% since the results and currently trades at $498.99.
Read our full analysis of Lockheed Martin’s results here.
Mercury Systems (NASDAQ: MRCY)
Founded in 1981, Mercury Systems (NASDAQ: MRCY) specializes in providing processing subsystems and components for primarily defense applications.
Mercury Systems reported revenues of $273.1 million, up 9.9% year on year. This result beat analysts’ expectations by 11.9%. Overall, it was an incredible quarter as it also logged an impressive beat of analysts’ organic revenue estimates and a beat of analysts’ EPS estimates.
The stock is up 51.9% since reporting and currently trades at $81.61.
Read our full, actionable report on Mercury Systems here, it’s free.
Byrna (NASDAQ: BYRN)
Providing civilians with tools to disable, disarm, and deter would-be assailants, Byrna (NASDAQ: BYRN) is a provider of non-lethal weapons.
Byrna reported revenues of $28.51 million, up 40.6% year on year. This number was in line with analysts’ expectations. It was an exceptional quarter as it also put up a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The stock is down 30.8% since reporting and currently trades at $22.32.
Read our full, actionable report on Byrna here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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