As the Q3 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 Hexcel (NYSE:HXL) 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 12 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.
In light of this news, share prices of the companies have held steady as they are up 4.1% on average since the latest earnings results.
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 fell short of analysts’ expectations by 1%. Overall, it was a slower quarter for the company with a significant miss of analysts’ adjusted operating income estimates.
CEO and President Tom Gentile said, “Hexcel saw 9% growth in total revenue year over year, driven by a robust 17% growth in commercial aerospace. Year-to-date commercial aerospace is now up 14%. Air traffic continues to grow post pandemic leading to record demand for aircraft that use Hexcel lightweight materials, but supply chain challenges in the global aerospace industry continue to delay planned production rate increases at our major customers. Our customers are currently indicating that production rates will increase in 2025. We will continue to monitor our cost and labor training position to meet those projected production rate increases as schedules firm.”
Still, the market seems discontent with the results. The stock is down 0.5% since reporting and currently trades at $61.49.
Read our full report on Hexcel 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 an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $65.02.
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 significantly and a significant miss of analysts’ adjusted operating income estimates.
As expected, the stock is down 5.6% since the results and currently trades at $82.02.
Read our full analysis of Textron’s results here.
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 came in 2.8% below analysts' expectations. Overall, it was a softer quarter as it also logged a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates.
The stock is up 38.4% since reporting and currently trades at $11.90.
Read our full, actionable report on Redwire here, it’s free.
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 result beat analysts’ expectations by 0.6%. Aside from that, it was a slower quarter as it logged full-year EPS guidance missing analysts’ expectations significantly and a significant miss of analysts’ EPS estimates.
TransDigm had the weakest full-year guidance update among its peers. The stock is down 6.4% since reporting and currently trades at $1,293.
Read our full, actionable report on TransDigm 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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