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 Textron (NYSE:TXT) 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 14 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.
Luckily, aerospace stocks have performed well with share prices up 10.9% on average since the latest earnings results.
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. This print fell short of analysts’ expectations by 2.7%. Overall, it was a disappointing quarter for the company with full-year EPS guidance missing analysts’ expectations.
"In the third quarter, Textron Aviation experienced a strike upon the expiration of its existing labor agreement with bargaining unit employees that was recently settled with the ratification of a new five-year contract," said Textron Chairman and CEO Scott C. Donnelly.
Unsurprisingly, the stock is down 11.4% since reporting and currently trades at $77.
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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, outperforming analysts’ expectations by 3.8%. The business had an incredible quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 7.8% since reporting. It currently trades at $60.25.
Boeing (NYSE: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 $17.84 billion, down 1.5% year on year, falling short of analysts’ expectations by 0.6%. It was a softer quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
Interestingly, the stock is up 12.9% since the results and currently trades at $180.45.
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 $1.01 billion, up 8.2% year on year. This print came in 1.7% below analysts' expectations. It was a softer quarter as it also produced a miss of analysts’ organic revenue and adjusted operating income estimates.
The stock is down 7.2% since reporting and currently trades at $241.33.
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 number lagged analysts' expectations by 1%. Overall, it was a slower quarter as it also recorded a significant miss of analysts’ adjusted operating income estimates.
Hexcel achieved the highest full-year guidance raise among its peers. The stock is flat since reporting and currently trades at $63.27.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.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
