Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at Cadre (NYSE: CDRE) and its peers.
Emissions and automation are important in aerospace, so companies that boast advances in these areas can take market share. On the defense side, geopolitical tensions–whether it be Russia’s invasion of Ukraine or China’s aggression toward Taiwan–have highlighted the need for consistent or even elevated defense spending. As for challenges, demand for aerospace and defense products can ebb and flow with economic cycles and national defense budgets, which are unpredictable and particularly painful for companies with high fixed costs.
The 31 aerospace and defense stocks we track reported a strong Q1. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.
Luckily, aerospace and defense stocks have performed well with share prices up 13.5% on average since the latest earnings results.
Cadre (NYSE: CDRE)
Originally known as Safariland, Cadre (NYSE: CDRE) specializes in manufacturing and distributing safety and survivability equipment for first responders.
Cadre reported revenues of $130.1 million, down 5.6% year on year. This print exceeded analysts’ expectations by 3.1%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
“Following a record year, we continued to see strong and recurring demand for our best-in-class, mission-critical safety products in the first quarter,” said Warren Kanders, CEO and Chairman.
The stock is up 11.7% since reporting and currently trades at $33.02.
We think Cadre is a good business, but is it a buy today? Read our full report here, it’s free.
Best Q1: HEICO (NYSE: HEI)
Founded in 1957, HEICO (NYSE: HEI) manufactures and services aerospace and electronic components for commercial aviation, defense, space, and other industries.
HEICO reported revenues of $1.10 billion, up 14.9% year on year, outperforming analysts’ expectations by 3.5%. The business had a stunning quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 9% since reporting. It currently trades at $299.
Is now the time to buy HEICO? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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, down 3.3% year on year, falling short of analysts’ expectations by 3.4%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
Hexcel delivered the weakest full-year guidance update in the group. Interestingly, the stock is up 13.4% since the results and currently trades at $57.24.
Read our full analysis of Hexcel’s results here.
Huntington Ingalls (NYSE: HII)
Building Nimitz-class aircraft carriers used in active service, Huntington Ingalls (NYSE: HII) develops marine vessels and their mission systems and maintenance services.
Huntington Ingalls reported revenues of $2.73 billion, down 2.5% year on year. This result came in 2.1% below analysts' expectations. More broadly, it was a mixed quarter as it also logged an impressive beat of analysts’ EPS estimates but a significant miss of analysts’ adjusted operating income estimates.
The stock is down 2.2% since reporting and currently trades at $224.79.
Read our full, actionable report on Huntington Ingalls here, it’s free.
Lockheed Martin (NYSE: LMT)
Headquartered in Maryland, Famous for the F-35 aircraft, Lockheed Martin (NYSE: LMT) specializes in defense, space, homeland security, and information technology products.
Lockheed Martin reported revenues of $17.96 billion, up 4.5% year on year. This print beat analysts’ expectations by 1.1%. Overall, it was a strong quarter as it also put up an impressive beat of analysts’ backlog estimates and a solid beat of analysts’ adjusted operating income estimates.
The stock is up 5.4% since reporting and currently trades at $482.86.
Read our full, actionable report on Lockheed Martin here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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