This airline supplier is looking to increase revenues in three key areas. Analysts are forecasting growth of 10.5% next quarter and 17.8% next year.
Astronics (ATRO)
From The Complete Investor
Astronics (ATRO), the leading supplier of electrical power and motion and lighting and safety products to airlines, is another small tech company that could gain. While it’s not a dedicated defense play, a slice of its business (currently less than 10% of revenues) serves the military. In addition, Trump’s pledge to spend on U.S. infrastructure should extend to upgrading airports and airlines, generating more business for Astronics. Another favorable trend is the continued emergence of the middle class in developing countries, boosting demand for travel.
The company is looking to rebound from a weak third quarter after a strong second quarter in which its aerospace segment (about 80% of revenues) achieved record revenues and profits. CEO Peter Gundermann said no fundamental change seemed to account for the drop, which he attributed largely to coincidental timing as some customers shifted spending previously slated for the third quarter into the second quarter. A delay in obtaining certification for new antenna system products also contributed to the shortfall. The new certifications are expected to be complete in 2017.
Still, the company lowered its 2016 revenue guidance to $635 million-$645 million from the previous $655 million-$685 million. But if management is correct that the third-quarter setback is an anomaly, results should bounce back. We’ll be watching. Astronics is a buy up to $40.
Stephen Leeb, PhD. And Genia Turanova, The Complete Investor, www.completeinvestor.com, 866-833-2070, January 2017