Astronics’ second quarter drew a significant negative market reaction, as the company’s revenue missed Wall Street’s expectations and margins came under pressure from a series of one-off adjustments. Management pointed to continued momentum in its core Aerospace segment, which delivered record sales driven by higher demand for cabin power and inflight entertainment products. However, a $6.4 million adjustment in the Test segment and $6.2 million in restructuring charges related to exiting noncore product lines weighed on overall performance. CEO Peter Gundermann described the period as having “a number of puts and takes, but also consistent progress towards improved performance,” emphasizing the impact of the portfolio simplification and ongoing facility closures.
Is now the time to buy ATRO? Find out in our full research report (it’s free).
Astronics (ATRO) Q2 CY2025 Highlights:
- Revenue: $204.7 million vs analyst estimates of $208.3 million (3.3% year-on-year growth, 1.7% miss)
- Adjusted EPS: $0.38 vs analyst estimates of $0.38 (in line)
- Adjusted EBITDA: $25.41 million vs analyst estimates of $30.83 million (12.4% margin, 17.6% miss)
- The company lifted its revenue guidance for the full year to $850 million at the midpoint from $840 million, a 1.2% increase
- Operating Margin: 4%, in line with the same quarter last year
- Backlog: $645.4 million at quarter end
- Market Capitalization: $1.16 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Astronics’s Q2 Earnings Call
- Jonathan E. Tanwanteng (CJS Securities) pressed CEO Peter Gundermann for details on the drivers behind raised revenue guidance despite business exits and Test segment adjustments. Gundermann cited higher aircraft production rates and strong aftermarket demand as primary contributors.
- Tanwanteng (CJS Securities) also asked about margin expectations, especially regarding the impact of tariffs and EAC charges. Gundermann acknowledged tariff unpredictability but emphasized ongoing mitigation and confidence in sustaining Aerospace margins near 16% adjusted levels.
- Michael Frank Ciarmoli (Truist Securities) sought clarification on Aerospace margin sustainability and pricing power with major OEMs and airlines. Gundermann responded that Astronics has succeeded in negotiating price increases across both supplier- and buyer-furnished contracts.
- Ciarmoli (Truist Securities) inquired about the health of the retrofit and aftermarket business. Gundermann confirmed continued strength, attributing demand to rapid consumer electronics cycles driving aircraft upgrades across fleets.
- Ciarmoli (Truist Securities) questioned whether Astronics was considering strategic alternatives for the Test segment. Gundermann said no immediate plans exist and that management is focused on operational improvement before evaluating more significant changes.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely watch (1) execution of tariff mitigation strategies and progress on cost containment, (2) the ramp-up of major aircraft production programs and their effect on Aerospace segment growth, and (3) tangible improvements in the Test segment’s profitability as key U.S. Army programs advance. Additionally, we will track integration of the Envoy Aerospace acquisition and any further restructuring impacts on margins and cash flow.
Astronics currently trades at $33.39, down from $35.37 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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