Astronics sees Aerospace growth offset by Test Systems weakness

Astronics Corporation, a key US-based supplier of advanced technologies to the aerospace and defence sectors, has reported mixed financial results for the second quarter of 2025, reflecting robust growth in its Aerospace segment counterbalanced by ongoing challenges in its Test Systems division.

For the quarter ending June 28, 2025, consolidated sales were lifted by a strong performance in the Aerospace segment, which posted a US$16.7 million (9.4%) year-on-year increase, mainly driven by continued demand in the Commercial Transport market. However, this was partially offset by a US$10.1 million drop in sales from the Test Systems segment. Additionally, revisions to estimated costs on long-term mass transit contracts in the Test Systems segment negatively impacted overall sales by US$6.4 million.

Gross profit fell by US$2.7 million to US$52.8 million, or 25.8% of sales, largely due to a US$6.9 million impact from the aforementioned cost revisions. Further charges of US$5.8 million arose from ongoing simplification measures in the Aerospace business, including product portfolio restructuring and footprint rationalisation. Nonetheless, adjusted gross profit improved to US$59.7 million (29.2% of sales), up from 28.0% in Q2 2024, reflecting higher volume and productivity gains.

Selling, general and administrative expenses increased by US$2.7 million, which included a US$3.5 million charge linked to a patent infringement case in the UK. This was partially offset by lower legal costs elsewhere. Research and development spending declined by US$2.6 million, owing to project timing.

Operating income dropped US$2.8 million to US$4.8 million (2.3% of sales), primarily due to the cost revisions. However, adjusted operating income improved significantly to US$18.3 million, or 8.9% of sales, up from US$12.6 million (6.4%) in Q2 2024, reflecting volume-driven margin gains and cost-saving measures in Test Systems.

Following a refinancing in December 2024, interest expenses dropped sharply by 47.1% (US$2.8 million), supporting a rise in adjusted net income to US$13.7 million (US$0.38 per diluted share). This compares favourably to US$7.2 million in Q2 2024. Reported net income was relatively flat at US$1.3 million (US$0.04 per diluted share), marginally down from US$1.5 million a year earlier.

Consolidated adjusted EBITDA rose by 25.5% to US$25.4 million, accounting for 12.4% of consolidated sales, highlighting underlying improvements in operational efficiency despite ongoing segmental headwinds.