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Strong Buy on Astronics Corporation

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On Jun 1, Zacks Investment Research upgraded Astronics Corporation (ATRO - Free Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Astronics Corporation Inc. has witnessed rising earnings estimates after posting an earnings surprise in the first quarter 2013. Moreover, this aerospace and defense company delivered positive earnings surprises in 6 of the last 10 quarters with an average beat of 10.1%.

Astronics Corporation’s first quarter earnings per share came in at 56 cents, surpassing the Zacks Consensus Estimate by 19.1%. The results benefited from strong performance from both Aerospace and Test Systems. In addition, selling, general and administrative expenses, as a percentage of total revenue, declined 120 basis points in the reported quarter, benefiting margins.

Astronics Corporation’s total revenue in the first quarter increased 13.6% year over year. Strong orders booked by the company are also evident from its growing backlog. Astronics Corporation exited the first quarter 2013 with a backlog of $118.9 million, up 3.9% sequentially.

We believe Astronics Corporation’s decision to acquire the outstanding shares of PECO Inc. for approximately $136 million in cash, will benefit the company. PECO has been designing and manufacturing commercial aerospace interior components, having a longstanding relationship with many aerospace customers, including The Boeing Company (BA - Free Report) .

The Zacks Consensus Estimate for 2013 increased 5.7% to $2.04 per share as 2 out of 3 estimates were revised higher over the last 30 days. For 2014, 2 out of 3 estimates moved north over the same time frame, lifting the Zacks Consensus Estimate by 0.9% to $2.32 per share.

Other Stocks to Consider

Besides Astronics Corporation other operators in the industry with a favorable Zacks Rank are Alliant Techsystems Inc. , and Kratos Defense & Security Solutions Inc. (KTOS - Free Report) . Kratos Defense presently carries a Zacks Rank # 1 (Strong Buy), while Alliant holds a Zacks Rank #2 (Buy).

In-Depth Zacks Research for the Tickers Above

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The Boeing Company (BA) - free report >>

Astronics Corporation (ATRO) - free report >>

Kratos Defense & Security Solutions, Inc. (KTOS) - free report >>

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