Astronics Corp.

Astronics Corp.'s (ATRO - Snapshot Report) share price has recently rallied in response to the company's solid second-quarter results and optimistic outlook. The company has a record backlog of orders, and the next-year estimate is projecting 19% earnings growth.

Company Description

Astronics Corp., through its subsidiaries, designs and manufactures electrical and lighting component systems for the aerospace industry. The company was founded in 1968, has a market cap of $196 million and is based in East Aurora, New York.

Astronic's share price has been volatile over the last 9 months in a tumultuous economic environment, but the company gave itself a boost and made investors happy when it reported strong second-quarter results on Aug 1.

Second-Quarter Results

Revenue was up 15.8% from last year to $47.9 million. Net income increased 13.3%, jumping to $5.1 million from $4.5 million in the same period last year. This produced earnings of 60 cents per share, far ahead of analyst estimates of 31 cents per share.

Segment Analysis

The company noted that it experienced strong growth in sales to its military and business-jet markets, adding that sales to the business jet market increased 55% to $10.2 million. Military sales were up 32% from the same period last year.

Astronics also noted that its 2008, second-quarter orders totaled $38.7 million, a 14% increase from the year prior period. As of June 2008, the company reported a backlog of orders of $101.6 million, up from a backlog of $94.3 million in the same period last year, an indication that the company is experiencing strong demand for its products and services.

Company CEO Peter Gundermann said that, "We expect the rest of 2008 to be very good for Astronics."

Analyst Estimates

After the solid quarter and bullish language, analysts were quick to upgrade their earnings projections. The current-year estimate now stands at $1.67 per share, up from $1.28 60 days ago. The next-year estimate stands at $1.99 per share, a 19% earnings growth projection.

Based upon the next-year estimate, this stock is carrying a forward P/E multiple of 12X, a slight discount to the overall market.

The Chart

After the good quarter, shares of ATRO gapped higher, and have since advanced as high as $26. Since then, this stock has pressured, but been unable to advance past this short-term level of resistance, but continues to look well positioned to do so. Take a look at the chart below.