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Astronics' (ATRO) to Post Q2 Earnings: What's in the Cards?

Zacks Equity Research

Astronics Corporation ATRO is set to report second-quarter 2019 financial results on Aug 5, before market open.

In the last reported quarter, the company delivered a positive earnings surprise of 29.73%. Also, it came up with an average trailing four-quarter beat of 22.55%.

Let's take a closer look at the factors influencing Astronics’ results in the to-be-reported quarter.

Factors to Consider

With solid global air traffic growth bolstering the commercial aerospace and enhanced spending by the U.S. Department of Defense strengthening the defense market, airframe manufacturers are steadily increasing their production rate. This, in turn, can be expected to favor Astronics’ top-line growth in the quarter to be reported.

However, a drastic decline in deliveries of Boeing 737 Max jets is expected to hurt the company’s revenues. The Zacks Consensus Estimate for second-quarter revenues is pegged at $187.2 million, suggesting a 10.2% decline from the year-ago quarter’s reported figure. Per Astronics’ management, the second quarter is likely to be the weakest one in 2019, in terms of performance.  

In terms of innovation, the company launched SRB-406G S-type ELT — an upgraded emergency locator transmitter (ELT) for aircraft life rafts. This ELT includes GPS locator technology that will provide satellite-based position assistance during search and rescue operations. Astronics also unveiled an expanded line of CorePower power conversion products for use on commercial aircraft, business jets, and rotorcraft applications.

Astronics Corporation Price and EPS Surprise

Astronics Corporation Price and EPS Surprise

Astronics Corporation price-eps-surprise | Astronics Corporation Quote

Furthermore, Astronics introduced the new ME1000 family of mPCIe avionics interface cards for embedded aerospace applications. Backed by such innovations, the company is expected to usher in solid order growth, which is likely to get reflected in the soon to-be-reported quarter’s results.

However, the company expects to incur operating loss in the second quarter, which in turn may hurt its earnings growth. Moreover, Astronics anticipates restructuring charges of approximately $2 million to impact its results in the quarter to be reported.

For second-quarter earnings, the Zacks Consensus Estimate is pegged at 35 cents, implying a 28.6% decline from the year-ago quarter’s reported number.

Earnings Whispers

Our proven model does not show that Astronics is likely to beat on earnings in second-quarter 2019. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. This is not the case here, as you see below. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP.

Earnings ESP: Astronics has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Astronics currently carries a Zacks Rank #3.

Recent Defense Releases

Textron Inc. TXT reported second-quarter 2019 earnings from continuing operations of 93 cents per share, which surpassed the Zacks Consensus Estimate of 85 cents by 9.4%. The company carries a Zacks Rank #3.

Lockheed Martin Corp. LMT reported second-quarter 2019 earnings of $5 per share, which exceeded the Zacks Consensus Estimate of $4.74 by 5.5%. It carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hexcel Corporation HXL reported second-quarter 2019 earnings of 94 cents per share, which outpaced the Zacks Consensus Estimate of 88 cents by 6.8%. It carries a Zacks Rank of 2.

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