As a key supplier of systems for commercial aircraft production and retrofit work it is no surprise that Astronics will see a significant hit to its revenue in 2020. The company is not providing formal guidance, but in its quarterly earnings call this week CEO Peter Gundermann spoke to some of the numbers and just how bad the situation looks.
With Boeing and Airbus expecting 30-35% cuts in production rates it is relatively easy to translate the direct revenue hit for Astronics, as each new aircraft contains a specific set of components from the company. Gundermann believes the company will “need to model in 30-35% reductions, assuming the aircraft OEMs stick with those rates for the time being.” Just how long that production rate remains subdued will determine when that segment of the business will rebound. And there is reason to believe that number is soft, even as Gundermann notes Astronics has resumed production of some 737 MAX components.
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