Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Ducommun (NYSE:DCO) and the best and worst performers in the aerospace industry.
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 Q3. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 2% above.
Thankfully, share prices of the companies have been resilient as they are up 7.2% on average since the latest earnings results.
Best Q3: 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 $201.4 million, up 2.6% year on year. This print exceeded analysts’ expectations by 3.8%. Overall, it was an incredible quarter for the company with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
“VISION 2027 again this quarter is taking hold in many areas and especially in our margin growth, as our mix of Engineered Products and Aftermarket revenue continues to climb as a percentage of revenue. Q3 was another outstanding quarter for DCO as we once again grew our topline both year-over-year and sequentially, led by strength in both of our Military and Commercial Aerospace segments along with strong quarterly gross margins and Adjusted EBITDA margins,” said Stephen G. Oswald, chairman, president and chief executive officer.
Interestingly, the stock is up 1.4% since reporting and currently trades at $66.24.
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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 $104.8 million, up 54.9% year on year, outperforming analysts’ expectations by 2.4%. The business had a stunning quarter with EBITDA guidance for next quarter exceeding analysts’ expectations.
Rocket Lab pulled off the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 68.8% since reporting. It currently trades at $24.75.
Weakest Q3: 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 $3.43 billion, up 2.5% year on year, falling short of analysts’ expectations by 2.7%. It was a disappointing quarter as it posted full-year EPS guidance missing analysts’ expectations.
As expected, the stock is down 1.6% since the results and currently trades at $85.46.
Woodward (NASDAQ:WWD)
Initially designing controls for water wheels in the early 1900s, Woodward (NASDAQ:WWD) designs, services, and manufactures energy control products and optimization solutions.Woodward reported revenues of $854.5 million, up 10% year on year. This result topped analysts’ expectations by 5.3%. Overall, it was a very strong quarter as it also put up a solid beat of analysts’ organic revenue estimates and full-year EPS guidance exceeding analysts’ expectations.
The stock is up 1.7% since reporting and currently trades at $182.70.
Hexcel (NYSE:HXL)
Founded shortly after World War II by a group of engineers from UC Berkley, Hexcel (NYSE:HXL) manufactures lightweight composite materials primarily for the aerospace and defense sectors.Hexcel reported revenues of $456.5 million, up 8.8% year on year. This print lagged analysts' expectations by 1%. Overall, it was a slower quarter as it also produced a significant miss of analysts’ adjusted operating income estimates.
Hexcel delivered the highest full-year guidance raise among its peers. The stock is flat since reporting and currently trades at $64.
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), has 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 heading into 2025.Want to invest in winners with rock-solid fundamentals? Check out our and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
This content was originally published on Stock Story
