Astronics Corp (NASDAQ: ATRO) reported Q1 EPS of $2.35, versus $0.32 reported last year. Revenue for the quarter came in at $208.2 million versus the consensus estimate of $192.1 million.

• Strong sales of $208.2 million, up 16.3% over 2018 first quarter
• Improved operating margin of 11.0% with income from operations of $22.9 million
• Fifth consecutive quarter of record Aerospace sales; up 14.5% to $188.5 million
• Aerospace segment operating profit improves to $25.8 million, or 13.7% of sales
• Record Aerospace backlog of $329.2 million
• Strong bookings of $205.0 million
• Sale of semiconductor test business yields $80.1 million pre-tax gain

Peter J. Gundermann, President and Chief Executive Officer, commented, "Our Company had a strong start to the year. Activity during the first quarter was brisk, with solid demand across our product lines as well as expanding margins. Our Aerospace business drove our improved results, achieving yet another record in sales and ending the quarter with a record backlog. The strength in our first quarter numbers gives us increased confidence that 2019 will be another solid year for the Company."

Mr. Gundermann commented, “Margin improved across the business in the first quarter, despite another substantial loss from our previously discussed struggling Aerospace businesses. We also ended the first quarter facing some cost challenges in our Test business as it adjusted to lower volumes without the semiconductor business. We addressed both of these situations with restructuring initiatives early in the second quarter which, when combined with anticipated revenue increases, will bring the struggling businesses closer to break-even in coming quarters.”

GUIDANCE:

Astronics Corp sees FY2019 revenue of $760-805 million, versus the consensus of $777.54 million.

• Astronics reiterated its expectations for 2019 with consolidated annual sales to be in the range of $760 million to $805 million, of which $710 million to $745 million is expected from the Aerospace segment and $50 million to $60 million is expected from the Test segment.
• Consolidated backlog at March 30, 2019 was $400.2 million. Approximately 84% of the backlog is expected to ship in 2019.
• The effective tax rate for 2019, excluding the impact of the gain on the sale of the semiconductor business, is expected to be in the range of 18% to 22%.
• Capital equipment spending in 2019 is expected to be between $22 million to $28 million.

Mr. Gundermann concluded, “We had a solid first quarter and, as a result, we are maintaining our sales forecast for the year. The forecast at the midpoint implies growth of around 10% over 2018 after adjusting for the divestiture of the semiconductor test business. We expect the second quarter to be somewhat lighter than the first, with the third and fourth quarters strengthening again. The second quarter will also see a charge of approximately $2 million related to the recent restructuring initiatives that have been implemented. These initiatives collectively will result in approximately

$7 million of annual savings, split evenly between our two segments.”

For earnings history and earnings-related data on Astronics Corp (ATRO) click here.