Astronics delivered a first quarter that surpassed Wall Street’s expectations, driven by robust demand in its Aerospace segment and operational improvements across the business. Management attributed the strong performance to record bookings, improved supply chain efficiency, and continued strength in commercial transport and military programs. CEO Pete Gundermann highlighted that, beyond one-time events, the quarter benefited from “steady operational improvement across the business,” with particular momentum from the FLRAA military program and increased demand for cabin power and in-flight entertainment products.
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Astronics (ATRO) Q1 CY2025 Highlights:
- Revenue: $205.9 million vs analyst estimates of $191.9 million (11.3% year-on-year growth, 7.3% beat)
- Adjusted EPS: $0.44 vs analyst estimates of $0.30 (46.7% beat)
- Adjusted EBITDA: $30.74 million vs analyst estimates of $26.49 million (14.9% margin, 16% beat)
- The company reconfirmed its revenue guidance for the full year of $840 million at the midpoint
- Operating Margin: 6.4%, up from 0.6% in the same quarter last year
- Backlog: $673 million at quarter end
- Market Capitalization: $1.19 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 Astronics’s Q1 Earnings Call
- Jon Tanwanteng (CJS Securities): Asked about mitigation strategies for the estimated $10–20 million tariff impact. CEO Pete Gundermann explained the company is considering supply chain shifts and pricing adjustments, but must wait for tariff details before acting.
- Jon Tanwanteng (CJS Securities): Inquired about the scope of ongoing business reviews and whether they could lead to restructuring or strategic changes. Gundermann said all options are open, but decisions will follow completion of the reviews, with the Test segment getting particular attention.
- Jon Tanwanteng (CJS Securities): Requested an update on expectations for Boeing 737 production rates. Gundermann responded that Astronics remains encouraged by Boeing’s progress and has not seen major changes affecting its own forecasts.
- Sam Struhsaker (Truist Securities): Asked about the mix of aerospace demand between airlines and OEMs. Gundermann noted demand is strong and balanced across both segments, with no signs of weakness outside of potential tariff impacts.
- Sam Struhsaker (Truist Securities): Queried about the potential for further losses in the Test segment. Gundermann acknowledged ongoing risk and said comprehensive reviews are underway to address persistent challenges.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will watch (1) progress in mitigating tariff-related cost risks through supply chain and pricing actions, (2) margin trends in the Aerospace segment as order volume remains elevated, and (3) tangible evidence of a turnaround or stabilization in the Test segment’s performance. Developments in the U.K. legal matter and any strategic portfolio actions will also be closely monitored.
Astronics currently trades at $34.28, up from $23.48 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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