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 Q3. Today, we are looking at aerospace stocks, starting with Textron (NYSE:TXT).
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 missed analysts’ consensus estimates by 2.1% while next quarter’s revenue guidance was 0.7% below.
In light of this news, share prices of the companies have held steady as they are up 1.7% on average since the latest earnings results.
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 $3.60 billion, up 5.1% year on year. This print fell short of analysts’ expectations by 1.9%. Overall, it was a mixed quarter for the company with an impressive beat of analysts’ EBITDA estimates but a miss of analysts’ revenue estimates.
"Overall, third quarter revenue was up 5% for Textron with higher revenues at Aviation, Bell, and Textron Systems," said Textron Chairman and CEO Scott C. Donnelly.
Interestingly, the stock is up 1.1% since reporting and currently trades at $83.52.
Is now the time to buy Textron? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: AAR (NYSE:AIR)
The first third-party MRO approved by the FAA for Safety Management System Requirements, AAR (NYSE:AIR) is a provider of aircraft maintenance services
AAR reported revenues of $739.6 million, up 11.8% year on year, outperforming analysts’ expectations by 7.4%. The business had an exceptional quarter with an impressive beat of analysts’ adjusted operating income estimates and a solid beat of analysts’ revenue estimates.
AAR achieved the biggest analyst estimates beat among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $79.51.
Is now the time to buy AAR? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: 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 $71.19 million, down 13.9% year on year, falling short of analysts’ expectations by 30.5%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue estimates and a significant miss of analysts’ adjusted operating income estimates.
AerSale delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 3.9% since the results and currently trades at $6.72.
Read our full analysis of AerSale’s results here.
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 $995.3 million, up 16.5% year on year. This result surpassed analysts’ expectations by 5.9%. It was a very strong quarter as it also put up a solid beat of analysts’ organic revenue estimates and an impressive beat of analysts’ EBITDA estimates.
The stock is up 8.6% since reporting and currently trades at $288.
Read our full, actionable report on Woodward here, it’s free for active Edge members.
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 $456.2 million, flat year on year. This print topped analysts’ expectations by 3%. However, it was a slower quarter as it recorded full-year EPS guidance missing analysts’ expectations significantly and full-year revenue guidance slightly missing analysts’ expectations.
The stock is up 23.2% since reporting and currently trades at $78.54.
Read our full, actionable report on Hexcel here, it’s free for active Edge members.
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), 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 for 2025.
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