TAT Technologies (NASDAQ:TATT) Issues Earnings Results, Beats Estimates By $0.05 EPS

Key Points

• TAT Technologies beat quarterly estimates: EPS was $0.35 versus the $0.30 consensus, while revenue reached $52.94 million compared with expectations of $44.86 million.
• Demand remains strong, with year-over-year revenue growth of nearly 23% and record backlog plus long-term agreements totaling $650 million. An expanded Honeywell partnership also grants TAT exclusive global distribution rights for a key APU platform and extends its MRO license through 2036.
• Supply-chain constraints remain a concern: Parts shortages and higher procurement costs are pressuring margins and cash flow, despite improved operating profitability. Analysts maintain a consensus “Buy” rating with a $57.29 price target.

TAT Technologies (NASDAQ:TATT - Get Free Report) posted its quarterly earnings results on Wednesday. The aerospace company reported $0.35 earnings per share for the quarter, topping the consensus estimate of $0.30 by $0.05, FiscalAI reports. TAT Technologies had a net margin of 9.27% and a return on equity of 9.47%. The business had revenue of $52.94 million during the quarter, compared to the consensus estimate of $44.86 million.

Here are the key takeaways from TAT Technologies' conference call:

• Record backlog and strong demand drove second-quarter revenue up nearly 23% year over year to $52.9 million, with backlog and long-term agreements reaching a record $650 million.
• The expanded Honeywell relationship makes TAT the sole global authorized distributor of spare parts for the 331-250 APU platform, extends the MRO license through 2036, and adds three 131-9A APUs to its trading and leasing business.
• Profitability improved despite supply-chain inefficiencies, with operating margin rising to 10.6% and gross margin remaining above 25%; management expects further operating leverage as revenue grows.
• Supply-chain constraints remain a risk, particularly in landing gear and APU parts, where lead times can exceed 12 months. The company is increasing inventory and paying higher procurement costs, which is pressuring margins and near-term cash flow.
• Net income benefited from a $4.3 million one-time gain, while operating cash flow was negative $0.6 million due to inventory investments and delayed collections. Management is evaluating a robust M&A pipeline, intending to maintain disciplined valuations and moderate leverage.

TAT Technologies Trading Up 3.6%

Shares of TAT Technologies stock traded up $1.50 during trading on Wednesday, reaching $43.15. 581,192 shares of the stock were exchanged, compared to its average volume of 195,475. The company has a quick ratio of 2.46, a current ratio of 4.69 and a debt-to-equity ratio of 0.05. The stock's fifty day moving average is $43.36 and its 200 day moving average is $45.13. The firm has a market cap of $560.98 million, a price-to-earnings ratio of 33.32 and a beta of 1.00. TAT Technologies has a 1 year low of $30.35 and a 1 year high of $64.50.

Insider Transactions at TAT Technologies

In related news, insider Paul Maness sold 5,000 shares of the business's stock in a transaction dated Wednesday, June 17th. The stock was sold at an average price of $45.41, for a total transaction of $227,050.00. Following the transaction, the insider owned 5,000 shares in the company, valued at $227,050. The trade was a 50.00% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, COO Jason Lewandowski sold 3,125 shares of the company's stock in a transaction that occurred on Tuesday, May 26th. The shares were sold at an average price of $39.22, for a total value of $122,562.50. Following the transaction, the chief operating officer directly owned 3,125 shares of the company's stock, valued at $122,562.50. The trade was a 50.00% decrease in their position. The disclosure for this sale is available in the SEC filing. 8.75% of the stock is owned by insiders.

Institutional Trading of TAT Technologies

Large investors have recently added to or reduced their stakes in the stock. Greenline Wealth Management LLC purchased a new stake in shares of TAT Technologies in the 4th quarter worth about $41,000. Royal Bank of Canada lifted its holdings in TAT Technologies by 978.8% in the fourth quarter. Royal Bank of Canada now owns 1,122 shares of the aerospace company's stock worth $50,000 after buying an additional 1,018 shares during the period. PNC Financial Services Group Inc. bought a new stake in TAT Technologies during the 3rd quarter valued at approximately $53,000. Quantbot Technologies LP purchased a new position in shares of TAT Technologies during the 3rd quarter worth approximately $121,000. Finally, Osaic Holdings Inc. grew its holdings in shares of TAT Technologies by 470.9% during the 2nd quarter. Osaic Holdings Inc. now owns 5,424 shares of the aerospace company's stock worth $166,000 after acquiring an additional 4,474 shares during the period. Institutional investors own 15.13% of the company's stock.

Wall Street Analyst Weigh In

Several research analysts have recently commented on the company. William Blair reiterated a "hold" rating on shares of TAT Technologies in a report on Wednesday, July 15th. Truist Financial upgraded TAT Technologies to a "strong-buy" rating in a research report on Friday, May 1st. Zacks Research raised TAT Technologies from a "strong sell" rating to a "hold" rating in a research note on Friday, May 22nd. B. Riley Financial assumed coverage on TAT Technologies in a research report on Wednesday, April 8th. They issued a "buy" rating and a $61.00 price objective for the company. Finally, Benchmark restated a "buy" rating on shares of TAT Technologies in a report on Wednesday, July 15th. Three research analysts have rated the stock with a Strong Buy rating, four have issued a Buy rating and three have given a Hold rating to the stock. According to data from MarketBeat.com, the stock presently has a consensus rating of "Buy" and a consensus price target of $57.29.

About TAT Technologies

TAT Technologies Ltd. is a global provider of environmental control and thermal management solutions for the aerospace industry. The company specializes in the design, manufacturing and support of aircraft environmental control systems (ECS), heat exchangers and related components. Its product portfolio serves commercial and military airframers, engine manufacturers and airlines, offering critical systems that regulate cabin pressure, temperature and ventilation on fixed-wing and rotary aircraft.

Key offerings include air cycle machines, preconditioned air units, steam/water separators and specialty heat exchangers engineered to meet stringent aerospace standards.

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