Astronics Corp (NASDAQ:ATRO) Shares Drop 11% After Mixed Q2 2025 Earnings Report

Astronics Corp. (NASDAQ:ATRO) Reports Mixed Q2 2025 Results, Shares Drop Sharply

Astronics Corp. (NASDAQ:ATRO) posted second-quarter earnings that fell short of revenue expectations but exceeded adjusted earnings per share (EPS) estimates. Despite the earnings beat, the stock tumbled nearly 11% in after-hours trading, reflecting investor concerns over profitability and operational challenges.

Key Financial Highlights

• Revenue: $204.7 million, missing analyst estimates of $209.9 million.
• Adjusted EPS: $0.38, beating expectations of $0.32.
• Net Income: $1.3 million, down from $1.5 million in Q2 2024.
• Gross Margin: 25.8%, down from 28.0% a year ago, impacted by cost revisions in the Test Systems segment and restructuring charges.

Market Reaction

The immediate sell-off suggests investors were disappointed with the revenue miss and margin compression, despite the adjusted earnings beat. The company’s aerospace segment delivered record sales ($193.6 million, up 9.4% YoY), but profitability was weighed down by one-time charges, including a $6.9 million cost adjustment in the Test Systems division and $5.8 million in restructuring expenses.

Segment Performance

• Aerospace: Strong demand in commercial transport and military markets drove sales, but operating profit declined due to legal fees and warranty adjustments. Adjusted operating margin improved to 16.3%, up 300 basis points YoY.
• Test Systems: Revenue fell sharply (-$10.1 million YoY) due to contract cost revisions, leading to a $6.7 million operating loss.

Outlook vs. Analyst Estimates

Astronics raised its full-year revenue guidance to $840–$860 million (up from $820–$860 million), aligning closely with the consensus estimate of $861.7 million. However, tariff-related cost pressures ($15–$20 million before mitigation) remain a concern.

Liquidity & Backlog

• Backlog: $645.4 million (75% expected to convert within 12 months).
• Liquidity: $191.3 million, with net debt at $145.8 million.

Conclusion

While Astronics’ aerospace business shows resilience, the Test Systems segment’s struggles and margin pressures overshadowed the earnings beat. The after-hours decline reflects skepticism about near-term profitability improvements.

For detailed earnings estimates and historical performance, visit Astronics’ earnings page.

Disclaimer: This article is not investment advice. Investors should conduct their own research before making decisions.