Astronics CEO Warns Data-Center Competition Is Stretching Memory Supply As Aircraft Demand Holds
The supplier kept its annual revenue outlook, but program rescheduling and longer component waits complicate its finish to 2026.
Astronics, which makes aircraft electrical systems and automated testing equipment, faces longer waits and higher prices for memory components also used in data centers, Chairman, President and Chief Executive Officer Peter Gundermann warned on Tuesday's earnings call. The supply pressure comes as the company expects another year of strong double-digit growth in 2027 and reported sales growth of 28.5% to $271.7 million in its third-quarter results release.
Memory Waits Complicate The Finish
Gundermann said the pressure had become more noticeable over the past three months: "we're seeing lead time stretch out". Astronics is working with customers on solutions that have so far limited the impact, he said, describing the constraints as narrower than the widespread electronics shortages of earlier years.
A Craig-Hallum analyst pressed him on scheduling visibility and the fourth-quarter revenue forecast of $255 million to $275 million. Gundermann acknowledged: "It is a wider range than we would like to go out with at this point". He attributed the expected modest decline from the third quarter at the midpoint to customer scheduling, rather than a major business change.
The MV75 aircraft program also has moved from repeated acceleration to rescheduling. Chief Financial Officer Nancy Hedges said on the call that expected 2026 program revenue would be closer to $35 million because of the replanning. Gundermann's best estimate for 2027 is a similar rate, pending direction from Bell.
Customer deferrals have not been significant, Gundermann told a TD Cowen analyst. The distinction matters: management described a challenge in obtaining components and scheduling deliveries, rather than weakening customer orders.
Orders Support The Growth Case
Astronics ended the quarter with a $780 million backlog, roughly even with the second-quarter level management called a record. Approximately 83% is expected to become revenue over the next twelve months. The company maintained its 2026 revenue forecast of $1.02 billion to $1.04 billion, implying 19.5% growth at the midpoint.
Aerospace sales rose 27.4% to $245.5 million, while Test Systems sales increased 40% to $26.2 million. Astronics supplies aircraft manufacturers, airlines and defense customers with power, lighting, safety, seat-motion and other systems; commercial transport accounted for 75% of Aerospace sales in 2025.
Gundermann's growth case rests on rising aircraft production, passenger connectivity, advanced electrical power systems, premium seating and the U.S. Army radio-testing program. That testing program generated $5.3 million during the quarter and is expected to reach full production in the first quarter of 2027.
Asked by a KeyBanc analyst about seat-motion capacity, Gundermann said Astronics can meet current demand and is examining expansion. He also said Boeing shipments were broadly matching production needs, rather than building customer inventory.
Margins Improve, Projects Shift
Adjusted operating income rose 96.6% to $51 million, with its margin reaching 18.8% from 12.3% a year earlier. Reported operating income was $54 million; results benefited from tariff refunds and legal recoveries. Management credited higher volume and productivity, and said contract repricing, workforce stabilization and business simplification still offer room for improvement.
Hedges lowered expected capital spending to $25 million–$30 million from $40 million–$45 million. She attributed the reduction to project timing, not a retreat from growth investment. Astronics spent $21.1 million through the first nine months, including work on its now-completed Seattle consolidation and capacity expansion.
The company generated $25.8 million in operating cash during the quarter and ended it with $284.8 million of long-term debt, down $49.7 million from year-end. Inventory increased to support anticipated 2027 demand.
Gundermann expects formal 2027 revenue guidance closer to year-end. Asked to clarify the preliminary growth outlook, he said it meant "Something well north of 10%, exactly."
Sources
- Astronics results release (Form 8-K, EX-99.1) — SEC EDGAR
- Astronics Corporation Reports Record Operating Income on 28% Sales Growth for Third Quarter 2026 — businesswire.com
