Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at Textron (NYSE: TXT) 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 Q1. As a group, revenues missed analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was in line.
Luckily, aerospace stocks have performed well with share prices up 13.4% on average since the latest earnings results.
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 $3.31 billion, up 5.5% year on year. This print exceeded analysts’ expectations by 2.3%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ organic revenue estimates.
"In the quarter, we saw strong growth in both military and commercial product lines at Bell," said Textron Chairman and CEO Scott C. Donnelly.
The stock is up 11.9% since reporting and currently trades at $74.
Is now the time to buy Textron? Access our full analysis of the earnings results here, it’s free.
Best Q1: 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 $1.10 billion, up 14.9% year on year, outperforming analysts’ expectations by 3.5%. The business had a stunning quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 8.6% since reporting. It currently trades at $298.08.
Is now the time to buy HEICO? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $65.78 million, down 27.4% year on year, falling short of analysts’ expectations by 26.3%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
AerSale delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 17.6% since the results and currently trades at $5.79.
Read our full analysis of AerSale’s results here.
Rocket Lab (NASDAQ: RKLB)
Becoming the first private company in the Southern Hemisphere to reach space, Rocket Lab (NASDAQ: RKLB) offers rockets designed for launching small satellites.
Rocket Lab reported revenues of $122.6 million, up 32.1% year on year. This print beat analysts’ expectations by 0.8%. It was an exceptional quarter as it also recorded EBITDA guidance for next quarter exceeding analysts’ expectations.
Rocket Lab delivered the fastest revenue growth among its peers. The stock is up 17% since reporting and currently trades at $27.06.
Read our full, actionable report on Rocket Lab here, it’s free.
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 $2.15 billion, up 12% year on year. This number came in 0.7% below analysts' expectations. Taking a step back, it was a mixed quarter as it also logged an impressive beat of analysts’ adjusted operating income estimates but a slight miss of analysts’ organic revenue estimates.
The stock is flat since reporting and currently trades at $1,461.
Read our full, actionable report on TransDigm 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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