Astronics Adjusted Operating Profit Climbs 97% As Sales Rise 29%
Legal recoveries helped reported earnings, while Astronics maintained its annual revenue outlook and paid down debt.
Astronics, which makes aircraft power, lighting and seat-motion systems and automated testing equipment, increased adjusted operating profit about 97% to $51.0 million in the third quarter as sales rose about 29% to $271.7 million. The results accompanied Tuesday's SEC earnings filing; revenue grew across both businesses, while refunds and legal recoveries also helped profitability.
The Profit Rebound Has Extra Ingredients
Sales increased 28.5% from $211.4 million a year earlier, while operating profit rose 134.1% to $54.0 million from $23.1 million, according to the accompanying earnings release. Astronics kept 19.9% of sales as operating profit, compared with 10.9% a year earlier. Its adjusted operating margin reached 18.8%, up from 12.3%.
Net income was $52.2 million, or $1.08 per diluted share, against a loss of $11.1 million, or $0.26 per share. But the prior-year loss included a $32.6 million charge from repurchasing some convertible debt during the September 2025 refinancing. The operating-profit comparison gives a clearer view of business improvement than the bottom-line reversal alone.
This quarter also received help from $1.9 million in tariff refunds, approximately $4.4 million recovered through a successful UK patent appeal and a separate $1.0 million settlement. Astronics attributed its gross-margin improvement to higher volume, better productivity and the tariff refunds; gross margin reached 34.6%, versus 30.5%.
Interest expense fell 37.1% to $1.8 million, which the company attributed to lower debt and rates following the refinancing. Tax credits, research-cost deductions and a partial reversal of a tax valuation allowance produced a $0.2 million tax benefit despite $52.0 million in pretax income. Adjusted net income, which uses a normalized tax rate and other adjustments, rose 100.3% to $38.9 million.
Aircraft Cabins And Army Radios
Aerospace sales grew 27.4% to $245.5 million. Astronics tied commercial-transport growth primarily to entertainment and connectivity equipment, seat-motion systems, lighting and safety products. Commercial-transport revenue rose 28.8% to $192.2 million.
General Aviation sales increased 51.7% to $21.1 million, which the company attributed to entertainment and connectivity products. Military Aircraft revenue rose 5.3% to $29.0 million on higher sales of critical aircraft power equipment. Aerospace's adjusted operating profit grew 71.5% to $55.1 million, with a 22.5% margin.
The business sells to aircraft manufacturers, suppliers, airlines and the U.S. Department of Defense, and provides certification services. Commercial transport represented 75% of Aerospace sales in 2025. Current results include Bühler Motor Aviation, which Astronics bought on October 13, 2025.
Test Systems revenue increased 40.0% to $26.2 million, primarily because of the U.S. Army radio-test program, Astronics said. That program generated $5.3 million in quarterly sales. Revised cost estimates for mass-transit contracts reduced recognized revenue by $2.2 million. Test Systems earned $3.9 million in operating profit, compared with roughly break-even a year earlier.
Debt Falls, Forecast Holds
Astronics generated $25.8 million in quarterly operating cash and spent $4.2 million on capital projects. Receivables and inventory absorbed cash, with the company building inventory for anticipated 2027 growth. Long-term debt fell $25.6 million from the second quarter to $284.8 million, and was $49.7 million below its year-end 2025 level.
Quarterly orders totaled $271.1 million, roughly matching sales. Aerospace orders exceeded sales for five consecutive quarters, and its unfilled orders reached what Astronics called a record $670.0 million. Total backlog was $780.0 million; the company expects approximately 83% to become revenue over the next twelve months.
Astronics maintained its annual revenue forecast of $1.02 billion to $1.04 billion, representing 19.5% growth at the midpoint. It expects fourth-quarter sales of $255 million to $275 million.
Chairman, President and Chief Executive Officer Peter J. Gundermann said, "While fourth quarter sales may be modestly lighter than the third quarter record level, our preliminary outlook for 2027 suggests another year of strong double digit growth."
The company expects annual capital spending of $25 million to $30 million, largely for the Seattle consolidation completed in the third quarter. It also estimates future tariff refunds of $5 million to $6 million.
Astronics expects the U.S. Army radio-test program to reach full-rate production in the first quarter of 2027.
Sources
- 8-K Filing — ASTRONICS CORP (ATRO) — SEC EDGAR
- Exhibit ex99120261003-pr.htm — ASTRONICS CORP 8-K exhibit — SEC EDGAR
- Astronics Corporation Reports Record Operating Income on 28% Sales Growth for Third Quarter 2026 — businesswire.com
