As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at aerospace stocks, starting with AerSale (NASDAQ:ASLE).
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 1.2% while next quarter’s revenue guidance was in line.
Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.
Thankfully, aerospace stocks have been resilient with share prices up 8.7% on average since the latest earnings results.
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. This print fell short of analysts’ expectations by 12.7%. Overall, it was a disappointing quarter for the company with a miss of analysts’ earnings estimates.
Nick Finazzo, AerSale’s Chief Executive Officer, commented, “Our results improved over the prior year driven by higher feedstock acquisitions over the past 18 months, continued demand in MRO and incremental volume of AerSafe™.”
AerSale delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 9.2% since reporting and currently trades at $5.06.
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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 10.6% since reporting. It currently trades at $65.60.
Boeing (NYSE:BA)
One of the companies that forms a duopoly in the commercial aircraft market, Boeing (NYSE:BA) develops, manufactures, and services commercial airplanes, defense products, and space systems.Boeing reported revenues of $16.87 billion, down 14.6% year on year, falling short of analysts’ expectations by 2.8%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.
Boeing delivered the slowest revenue growth in the group. As expected, the stock is down 17.7% since the results and currently trades at $153.76.
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 topped analysts’ expectations by 2.5%. Overall, it was an exceptional quarter as it also logged an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ revenue estimates.
The stock is up 22.7% since reporting and currently trades at $101.70.
Rocket Lab (NASDAQ:RKLB)
Becoming the first 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 $106.3 million, up 71.2% year on year. This number met analysts’ expectations. More broadly, it was a mixed quarter as it also recorded an impressive beat of analysts’ earnings estimates but revenue guidance for next quarter missing analysts’ expectations.
Rocket Lab delivered the fastest revenue growth among its peers. The stock is up 89.3% since reporting and currently trades at $9.03.
This content was originally published on Stock Story
