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.
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.
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.
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.