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 Howmet (NYSE:HWM) 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 growth stocks with cash flows further into the future, had a good end of 2023. On the other hand, this year has seen more volatile stock market swings due to mixed inflation data. However, aerospace stocks have held steady amidst all this with share prices up 1.7% on average since the latest earnings results.
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 print exceeded analysts’ expectations by 2.5%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ Fastening systems revenue estimates and optimistic EBITDA guidance for the full year.
Howmet Aerospace Executive Chairman and Chief Executive Officer John Plant said, “In the second quarter 2024, the Howmet Aerospace team drove another very strong set of results, again exceeding the high end of guidance on all fronts. Revenue grew a healthy 14% year over year, with commercial aerospace revenue up 27%, continuing a strong trend. For the second consecutive quarter, Howmet achieved record quarterly results in revenue, adjusted EBITDA*, adjusted EBITDA margin* and adjusted earnings per share*. Adjusted EBITDA margin* of 25.7% was up approximately 340 basis points year over year, and adjusted earnings per share* grew 52%.”
Interestingly, the stock is up 14.6% since reporting and currently trades at $94.97.
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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%. It was a very 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 8.2% since reporting. It currently trades at $64.17.
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 8.1% since the results and currently trades at $5.12.
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%. Taking a step back, it was a weak quarter for the company with a miss of analysts’ earnings and volume estimates.
Boeing had the slowest revenue growth among its peers. The stock is down 7.7% since reporting and currently trades at $172.44.
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 $78.11 million, up 30% year on year, surpassing analysts’ expectations by 14.2%. Revenue aside, it was a weaker quarter for the company with a miss of analysts’ earnings estimates and full-year revenue guidance missing analysts’ expectations.
Redwire achieved the biggest analyst estimates beat but had the weakest full-year guidance update among its peers. The stock is up 11.7% since reporting and currently trades at $6.41.
This content was originally published on Stock Story
