Let’s dig into the relative performance of TransDigm (NYSE:TDG) and its peers as we unravel the now-completed Q3 aerospace earnings season.
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 9.2% on average since the latest earnings results.
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 $2.19 billion, up 18% year on year. This print exceeded analysts’ expectations by 0.6%. Despite the top-line beat, it was still a mixed quarter for the company with an impressive beat of analysts’ adjusted operating income estimates but full-year EPS guidance missing analysts’ expectations significantly.
"I am very pleased with our team's performance and the overall operating results for the fourth quarter and full year of fiscal 2024," stated Kevin Stein, TransDigm Group's President and Chief Executive Officer.
TransDigm delivered the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 9.1% since reporting and currently trades at $1,255.
Is now the time to buy TransDigm? Access our full analysis of the earnings results here, it’s free.
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 a solid beat of analysts’ EPS and EBITDA estimates.
The market seems content with the results as the stock is up 1% since reporting. It currently trades at $66.03.
Is now the time to buy Ducommun? Access our full analysis of the earnings results here, it’s free.
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 2.6% since the results and currently trades at $84.61.
Read our full analysis of Textron’s results here.
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 $1.84 billion, up 10.7% year on year. This print came in 1% below analysts' expectations. Zooming out, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ adjusted operating income estimates.
The stock is up 11.1% since reporting and currently trades at $113.45.
Read our full, actionable report on Howmet here, it’s free.
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 $68.64 million, up 9.6% year on year. This print missed analysts’ expectations by 2.8%. It was a softer quarter as it also produced a significant miss of analysts’ EBITDA and EPS estimates.
The stock is up 67.8% since reporting and currently trades at $14.43.
Read our full, actionable report on Redwire here, it’s free.
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% in November), 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 potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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