A Look Back at Aerospace Stocks’ Q2 Earnings: Rocket Lab (NASDAQ:RKLB) Vs The Rest Of The Pack
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Rocket Lab (NASDAQ:RKLB) and the rest of the aerospace stocks fared in Q2.
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 Q2. As a group, revenues beat analysts’ consensus estimates by 1.2% while next quarter’s revenue guidance was in line.
After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.
Thankfully, aerospace stocks have been resilient with share prices up 7.5% on average since the latest earnings results.
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 $106.3 million, up 71.2% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with an impressive beat of analysts’ earnings estimates but revenue guidance for next quarter missing analysts’ expectations.
Rocket Lab founder and CEO, Sir Peter Beck, said: “This year’s second quarter was Rocket Lab’s highest revenue quarter in Company history at $106 million.”
Rocket Lab achieved the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 97.5% since reporting and currently trades at $9.42.
Is now the time to buy Rocket Lab? Access our full analysis of the earnings results here, it’s free.
Best Q2: 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 $197 million, up 5.2% year on year, outperforming analysts’ expectations by 1.1%. The business had an exceptional quarter with an impressive beat of analysts’ earnings estimates.
The market seems happy with the results as the stock is up 6.1% since reporting. It currently trades at $62.91.
Is now the time to buy Ducommun? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $77.1 million, up 11.2% year on year, falling short of analysts’ expectations by 12.7%. It was a disappointing quarter as it posted a miss of analysts’ operating margin and earnings estimates.
AerSale delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 18.3% since the results and currently trades at $4.55.
Read our full analysis of AerSale’s results here.
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 $661.7 million, up 20.4% year on year. This print beat analysts’ expectations by 2.3%. It was a strong quarter as it also recorded a decent beat of analysts’ earnings estimates.
The stock is down 13.8% since reporting and currently trades at $59.55.
Read our full, actionable report on AAR here, it’s free.
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 $500.4 million, up 10.1% year on year. This result topped analysts’ expectations by 3%. Zooming out, it was a satisfactory quarter as it also logged an impressive beat of analysts’ operating margin estimates but underwhelming earnings guidance for the full year.
The stock is down 13.6% since reporting and currently trades at $58.71.
Read our full, actionable report on Hexcel here, it’s free.
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