Astronics Corp - Aggressive Growth

Astronics Corp

 (ATRO) analysts and management loved the first quarter results. The outlook has been raised for the year and pushed shares to a Zacks #1 Rank (Strong Buy). 

Currently there should be solid double-digit growth for the foreseeable future and the stock is regaining some momentum as well.

Company Description

Astronics Corp makes lighting, electrical power and automated test systems for the aerospace and defense industry.

Big Surprise

On May 4 the company reported quarterly results that showed an 18% increase in the top line, to just over $55 million. Combined with an increasing gross margin and reduced SG&A percent of sales, the income from operations swelled more than 33%.

Net income soared 53%, to $5.2 million. That works out to $0.45 per share, up 14 cents from last year and beating the Zacks Consensus Estimate by 13 cents. Astronics has now topped forecasts in 7 consecutive quarters.

Raising the Outlook

Management decided to raise its revenue outlook $5-$10 million for the year. The hot start to the year as well as feedback from customers and booking rates were cited for the increase.

Analysts are confident as well. Estimates are now averaging $1.56 for 2011, up 13 cents. Next year's projections are averaging $1.81, up 9 cents.

In 2010 the company made $1.32 per share, so the expected growth rates are now 18% and 16%, respectively.

Top of the Industry

Astronics has an ROE of most than 22%, which is double the industry average. They also have a net profit margin of 8.2%, 230 basis points above the norm for the peer group. So, it is no surprise that they are the top ranked of 27 companies in the industry.

Turning Around

Shares of ATRO are on the upswing recently and could be getting a buy signal from the momentum-based MACD. That could lead to more buying from swing traders and more gains to come.