Astronics Corp (ATRO) shares plunged 7.3% on Tuesday, despite reporting a 25% year-over-year increase in revenue for the third quarter of 2024. The aerospace and defense company's stock tumbled after it missed analysts' earnings estimates and reported a loss of $0.34 per share, compared to analysts' expectations of a profit of $0.08 per share.
While Astronics' revenue reached $203.7 million, exceeding expectations of $198.61 million, the company's profitability was impacted by several factors. Legal expenses of $5.6 million related to a UK patent infringement case, a $2.2 million charge due to the bankruptcy of an eVTOL customer, and a rare $3.5 million warranty reserve for an underperforming electrical power system weighed on the company's bottom line.
However, Astronics highlighted several positive developments during the quarter, including a 25% increase in sales for its aerospace segment and an improvement in adjusted operating margin to 14.2% in the segment. The company also reported a strong backlog of $612 million entering the fourth quarter and expressed optimism about continued growth and margin improvement in 2025.
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