What happened

Shares of Aerojet Rocketdyne Holdings Inc (NYSE:AJRD) rallied more than 12% by 10 a.m. EDT Tuesday after the company posted better-than-expected second-quarter results.

So what

Aerojet Rocketdyne recorded $467.2 million in revenue during the second quarter, which was 1.7% above the year-ago quarter and $3.5 million ahead of analysts' consensus forecast. Net income, meanwhile, rocketed 43% to $34.8 million and earnings jumped 40% to $0.45 per share, which beat analysts' expectations by $0.18 per share.

A rocket launching into space with clouds behind it

Image source: Getty Images.

Driving the higher sales and earnings were increased deliveries on its standard missile and PAC-3 programs, which offset lower sales from its space programs. Meanwhile, profits soared thanks to an improvement in margins as the company kept its costs in check.

Now what

Aerojet Rocketdyne's stronger-than-expected second-quarter showing is a welcome sign because it comes on the heels of a string of earnings misses. However, while the quarter was strong, it's unclear whether the company can maintain this momentum given its current backlog. Aerojet Rocketdyne ended Q2 with a total backlog of $3.9 billion, which is down from $4.6 billion at the end of last year. With the company expecting to recognize 48% of its remaining backlog in the next year, its financial results could dip in the future if it doesn't start booking new orders.

Matthew DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.