Group 1 - CEO Kelly Ortberg is making significant improvements at Boeing, although not to the extent of GE Aerospace's CEO Larry Culp [1] - Boeing's board has been strengthened with industrial leaders, including Carrier Global CEO David Gitlin and former GE Aviation CEO David Joyce, which reflects positively on the decision to hire Ortberg [2] - Since Ortberg's appointment in August 2024, Boeing has increased its 737 MAX production rate to 38 per month and plans to seek FAA approval to raise it to 42 per month [3] Group 2 - The defense segment, Boeing Defense, Space & Security (BDS), has shown notable recovery under Ortberg's leadership, with the replacement of BDS CEO Ted Colbert by Steve Parker [4] - BDS has reported profitability again after a period of losses, indicating improved cost management and execution [6] - BDS has maintained its estimated-at-completion cost forecasts for two consecutive quarters, which is significant for the business's financial health [6]

CHONGQING, CHINA - APRIL 20: In this photo illustration, the GE Aerospace logo is displayed on a smartphone screen on April 20, 2025, in Chongqing, China. (Photo illustration by Cheng Xin/Getty Images)Getty Images GE Aerospace (NYSE: GE) has performed exceptionally, with the stock climbing from roughly $100 in early 2024 to about $270 today—a striking 2.7x jump. This advance reflects the company’s pivot to a focused aerospace pure-play following its strategic breakup, the strength of its high-margin service ...

Financial Data and Key Metrics Changes - Consolidated net sales for Q2 2025 were $12.7 million, a decrease of approximately $800,000 or 6.7% compared to Q2 2024 [9] - Gross profit was $2 million, representing 16% of sales for Q2 2025 [9] - Adjusted EBITDA for the first half of 2025 was $1.469 million, a decrease of $306,000 or 17% from the prior year [10] - The company reported a net loss of $422,000 or $0.11 per share in 2025, compared to net income of $298,000 or $0.09 per share in 2024 [10] Business Line Data and Key Metrics Changes - The company faced delays in customer approvals and extended lead times from subcontractors, impacting overall results [4] - Cost-cutting initiatives, including a workforce reduction, are expected to save approximately $1 million annually [5] - The backlog grew to record levels, indicating sustained demand for products, with significant contracts such as a $5 million order for landing gear components for the B-52 aircraft [6] Market Data and Key Metrics Changes - The company noted that long lead times for raw materials and complex product manufacturing mean that sales from the backlog will primarily be realized in fiscal 2026 and beyond [6][7] - The business development team has been actively pursuing new opportunities, particularly following the Paris Air Show [7] Company Strategy and Development Direction - The company is focused on recovering from decreased revenue streams with legacy customers while reinforcing relationships with existing clients and expanding into new markets [12] - Recent accomplishments include receiving a significant long-term agreement from Northrop Grumman and increasing content on the CH-53K helicopter [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the disappointing results for Q2 2025 but expressed confidence in the long-term business outlook despite recent headwinds [5] - The company anticipates that the fourth quarter of 2025 will be the strongest quarter of the year [5] - Management emphasized that the backlog is healthy and that delays in customer approvals are temporary [32] Other Important Information - The company successfully completed an at-the-market offering, raising nearly $4 million, which enhances liquidity and reduces net debt [11] - Total debt has declined by over $1 million, while inventory has increased by about $1.3 million [11] Q&A Session Summary Question: Concerns about credit facility and liquidity - Management is in discussions with the current lender and is confident about extending the credit facility [19][20] Question: Nature of recent capital raise - The capital raise was part of a planned process initiated in December 2024, not solely opportunistic [21] Question: European sales potential - The company does not have significant European customers but is optimistic about potential sales due to increased European defense spending [23][26] Question: Clarification on declining sales - Sales decline is attributed to timing issues with customer approvals and delays in first articles [32][33] Question: Consideration of selling the company - Management stated that while sales have been stagnant, there has been growth in certain operations, and they are open to opportunities that benefit shareholders [36][39] Question: Backlog conversion rates - The backlog consists of firm and full backlog, with a significant portion being firm orders that cannot be easily canceled [41][43] Question: Future of manned aircraft vs. drones - Management believes that manned aircraft will continue to play a crucial role alongside drones, as they are not expected to be replaced in the near future [46][48]

Core Viewpoint - Spirit AeroSystems Holdings, Inc. has entered into a purchase agreement to sell its facility and businesses in Subang, Malaysia to Composites Technology Research Malaysia Sdn Bhd for $95.2 million, with the transaction expected to close in Q4 2025, pending regulatory approvals [1]. Group 1: Transaction Details - The sale price for the Subang facility is $95,200,000, subject to customary adjustments [1]. - The transaction is part of a broader strategy following a merger agreement with Boeing and a definitive agreement with Airbus [1]. - The closing of the transaction is anticipated in the fourth quarter of 2025, contingent on regulatory approvals and other closing conditions [1]. Group 2: Business Operations - The Subang facility is a significant engineering and manufacturing operation, covering 45 acres with a 400,000 square-foot manufacturing footprint and employing over 1,000 staff [2]. - The facility specializes in aerostructures assembly and services, providing an integrated supply chain with access to regional material sourcing and skilled labor [2]. Group 3: Supplier Relationships - Following the acquisition, CTRM will become a key supplier for Airbus's A220, A320, and A350 programs, as well as for Boeing's 737 and 787 programs [3]. - This acquisition is expected to strengthen the supply chain for both Airbus and Boeing, enhancing their production capabilities [3]. Group 4: Company Background - Spirit AeroSystems is one of the largest manufacturers of aerostructures for commercial and defense aircraft, with expertise in aluminum and advanced composite manufacturing [4]. - The company operates globally with facilities in the U.S., U.K., France, Malaysia, and Morocco, focusing on innovative and reliable supply solutions for military and commercial aerospace [4]. Group 5: CTRM Overview - Composites Technology Research Malaysia is recognized as a Tier 2 advanced aerospace composite supplier, specializing in the development and production of composite sub-assemblies for Tier 1 global aerospace suppliers [5]. - CTRM's expertise includes designing and manufacturing composite components for both aerospace and non-aerospace applications, along with offering support services such as testing and supplier management [5].

Core Insights - Howmet Aerospace Inc. (HWM) has shown consistent margin expansion, with adjusted EBITDA margins increasing from 26.5% in Q3 2024 to 28.7% in Q2 2025, reflecting a 300 basis point year-over-year improvement [1][8] Financial Performance - In Q2 2025, HWM's cost of goods sold rose by 6.1% year-over-year, but a significant 8.2% reduction in SG&A expenses helped maintain profitability [2] - The adjusted EBITDA margins for HWM's segments were as follows: Engine Products (up 200 basis points), Fastening Systems (up 360 basis points), and Engineered Structures (up 690 basis points), driven by manufacturing optimization and improved product mix [2] - HWM has raised its 2025 adjusted EBITDA margin guidance to a range of 28.5% to 28.6%, up from the previous estimate of 27.8% to 28.2%, indicating strong confidence in sustained performance [4] Market Dynamics - Strong demand in both commercial and defense aerospace markets is positively impacting HWM's performance, particularly with robust orders for F-35 engine spares and aerospace fastening systems [3] Peer Comparison - RTX Corporation's total costs increased by 6.4% year-over-year to $19.48 billion in Q2 2025, with an adjusted operating profit of $2.79 billion [5] - GE Aerospace experienced a 22.8% surge in cost of sales year-over-year in Q2 2025, but its adjusted operating profit rose by 23% [6] Stock Performance and Valuation - HWM's shares have increased by 95.1% over the past year, significantly outperforming the industry average growth of 16% [7] - The company is currently trading at a forward price-to-earnings ratio of 45.59X, which is above the industry average of 27.64X [10] Earnings Estimates - The Zacks Consensus Estimate for HWM's earnings has been rising over the past 60 days, with current estimates for the current quarter at $0.90 and for the next year at $4.28 [12]

Financial Performance - Textron's Q2 2025 revenues reached $3.7 billion, an increase from $3.5 billion in Q2 2024[4] - Segment profit slightly increased to $346 million in Q2 2025 from $343 million in Q2 2024[4] - Earnings per share (EPS) remained constant at $1.35 in both Q2 2025 and Q2 2024[4] - Adjusted EPS increased marginally to $1.55 in Q2 2025 from $1.54 in Q2 2024[4] - Manufacturing cash flow before pension contributions rose to $336 million in Q2 2025 from $320 million in Q2 2024[4] Revenue Growth by Segment - Bell experienced significant revenue growth of 28.0% organically[6] - Textron Aviation saw organic revenue growth of 2.8%[6] - Textron Systems experienced a slight organic revenue decrease of 0.6%[6] - Industrial segment's revenue decreased by 8.2%, but after accounting for divestiture impact of 3.6%, the organic decrease was 4.6%[6] - Textron eAviation's revenue decreased by 11.1%[6] Adjusted EBITDA - Adjusted EBITDA was $468 million in Q2 2025, slightly lower than the $473 million in Q2 2024[8]

Financial Performance - The company reported record quarterly revenue of $202.3 million, a 3% increase year-over-year[16] - Net income increased by 63% to $12.6 million, representing 6.2% of revenue[16] - Adjusted EBITDA reached an all-time high of $32.4 million, or 16% of revenue, up 80 bps year-over-year[16] - GAAP Operating Income was $17.2 million, while Adjusted Operating Income was $20 million, a 1% increase year-over-year[16] - GAAP EPS was $0.82, and Adjusted EPS was $0.88[16] Backlog and Bookings - The company's backlog stands at $1,018 million[18] - Bookings for Q2 2025 were $141 million[18] - The book-to-bill ratio for Q2 2025 is 0.7[19] Segment Performance - Structural Systems segment revenue was $92.0 million, a decrease of 3.7% year-over-year[28] - Electronic Systems segment revenue was $110.2 million, an increase of 8.7% year-over-year[34] - Electronic Systems operating margin was 19.0%, an increase of 250 bps[34] Outlook and Strategy - The company is on track to meet VISION 2027 targets, with revenue between $950 million and $1,000 million and an Adjusted EBITDA margin of 18%[13, 14] - The company reiterates its 2025 full-year revenue outlook, expecting mid-single-digit growth[21, 22] - Tariffs are not expected to have a significant impact on 2025 performance, with the majority of manufacturing in the USA (85%) and sales primarily in the USA (>95%)[25, 26]

Financial Performance - Spirit AeroSystems reported second quarter 2025 revenue of $1.635 billion, a 10% increase from $1.492 billion in the same period of 2024 [23] - The operating loss for the second quarter of 2025 was $481 million, compared to a loss of $331 million in the same period of 2024, representing a 45% increase in losses [23] - The net loss for the second quarter of 2025 was $631 million, a 52% increase from $415 million in the second quarter of 2024 [23] Earnings and Cash Flow - The second quarter 2025 EPS was $(5.36), compared to $(3.56) in the same period of 2024, indicating a 51% decline [6][23] - Cash used in operations improved to $144 million in the second quarter of 2025 from $566 million in the same period of 2024, a 75% improvement [23] - Free cash flow usage decreased to $190 million in the second quarter of 2025 from $597 million in the same period of 2024, a 68% improvement [23] Backlog and Deliveries - Spirit's backlog at the end of the second quarter of 2025 was approximately $51 billion, encompassing work packages on all commercial platforms in the Airbus and Boeing backlog [3] - Total deliveries in the second quarter of 2025 increased significantly, with Boeing 737 deliveries rising to 113 from 27 year-over-year [24] Segment Performance - The Commercial segment revenue increased to $1.266 billion in the second quarter of 2025, up 8.6% from $1.166 billion in the same period of 2024 [23] - The Defense & Space segment revenue rose to $266 million, an 18.5% increase from $224 million in the second quarter of 2024 [23] - The Aftermarket segment revenue increased slightly to $102.8 million, up 1.7% from $101.1 million in the same period of 2024 [23] Strategic Developments - The company entered into a merger agreement with Boeing, expected to close in the fourth quarter of 2025, subject to regulatory approvals and other conditions [10] - Spirit has received a request for additional information from the Federal Trade Commission as part of the regulatory review process for the merger [10] Recent Legislation Impact - The One Big Beautiful Bill Act (OBBBA) signed into law on July 4, 2025, includes business tax reform provisions, but is not expected to have a material impact on Spirit's financial statements or cash taxes in 2025 [12]

Financial Data and Key Metrics Changes - The company reported an EBITDA margin of 54.4% for Q3, supported by growth in the commercial aftermarket and effective operating strategies [11] - Operating cash flow for Q3 exceeded $630 million, with a cash balance of nearly $2.8 billion at the end of the quarter [11] - Full fiscal year 2025 sales guidance was decreased by $60 million to a midpoint of $8.79 billion, while EBITDA guidance was increased by $40 million to a midpoint of $4.725 billion, reflecting a 13% increase year-over-year [12][14] Business Line Data and Key Metrics Changes - Commercial OEM revenues decreased by 7% year-over-year in Q3, attributed to lower production rates at Boeing and Airbus [22][23] - Commercial aftermarket revenue increased by approximately 6% compared to the prior year, with growth across all submarkets [25] - Defense market revenue grew by approximately 13% year-over-year, with healthy bookings supporting continued growth expectations [27][28] Market Data and Key Metrics Changes - The commercial OEM market is expected to see revenue growth in the flat to low single-digit percentage range, a decrease from previous expectations [14] - The commercial aftermarket and defense markets are projected to grow in the high single-digit to low double-digit percentage range, with no changes to previous guidance [14] Company Strategy and Development Direction - The company aims to provide private equity-like returns with public market liquidity, focusing on proprietary aerospace businesses with significant aftermarket content [6][7] - Recent acquisitions, including Servotronics and Simmons Precision, align with the company's strategy to enhance its portfolio and drive growth [18][19] - The company maintains a disciplined approach to capital allocation, prioritizing reinvestment in businesses, accretive M&A, and returning capital to shareholders [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the commercial OEM market, despite current challenges, and expects a return to positive growth in Q4 [58] - The company remains vigilant regarding supply chain improvements, noting that while challenges persist, conditions are better than in previous years [71] - Management anticipates continued growth in the commercial aftermarket, supported by stable airline demand and operational excellence [15][25] Other Important Information - The company announced key leadership changes, with Mike Lisman set to become CEO following Kevin Stein's retirement [4][5][34] - The company is actively monitoring credit markets and assessing opportunities for leverage to support future acquisitions and shareholder returns [20][36] Q&A Session Summary Question: About the aftermarket performance and future growth - Management indicated that the commercial aftermarket growth aligns with expectations, and they feel confident about achieving the guidance for the year [42][44] Question: Visibility into fourth quarter growth rates - Management noted that they expect a significant acceleration in aftermarket growth in Q4, driven by improved production rates and easier comparisons [56][58] Question: Supply chain improvements and potential headwinds - Management reported ongoing improvements in the supply chain, though some bottlenecks remain, and they are hopeful for a quick resolution to any disruptions [71][72] Question: Defense business bookings and growth - Defense bookings were strong, with growth evenly distributed across operating units, supporting positive outlooks for the upcoming fiscal year [88][90] Question: Competitive landscape and second sourcing - Management stated that there have been no significant changes in the competitive landscape regarding second sourcing or PMA competition [96][97]

Core Points - Union members at Boeing's St. Louis facility rejected the latest contract offer and will strike starting midnight on Monday [1] - Boeing is prepared for the strike and has implemented a contingency plan [2] - The original contract proposal from Boeing included a 20% wage increase over four years and a $5,000 ratification bonus, which the union deemed insufficient [4] - A new contract offer was sent to the union with minor compensation changes benefiting senior members, while maintaining current overtime policies [5] - Boeing's defense division is expanding manufacturing facilities in St. Louis for the new F-47A fighter jet, following a recent contract win [6][7] - The upcoming strike involves 3,200 employees, significantly smaller than the previous strike involving 33,000 machinists last fall [6]