Boeing (BA) investors were in for a pleasant surprise earlier this week as the company reported better-than-expected results for Q4 2025.

Revenues surged to $23.9 billion, beating analyst estimates by $1 billion and representing a 57% year-over-year jump. Meanwhile, full-year 2025 revenues reached $89.5 billion, a 35% increase from the year prior.

Boeing’s most recent quarter results also marked the second consecutive quarter of positive free cash flow. 

These results were fueled by Boeing’s order backlog hitting a record $682 billion—the highest since 2018. 

Boeing has been in a slump in recent years as it faced increased regulatory scrutiny due to problems that arose with the 737 Max, the company’s next-generation passenger aircraft. As a result of these developments, the firm’s aircraft production plummeted beginning in 2019, delivering only 380 planes. 

Deliveries dipped further to 157 aircraft in 2020, to 340 in 2021, 480 in 2022, and 528 in 2023. While production has trended upward since 2020, these numbers remain well below Boeing’s pre-2019 average of over 740 annual deliveries from 2013 to 2018.

Aircraft delivery has been the key to Boeing’s recovery. Last year, 600 commercial deliveries were fulfilled. The company’s executives are banking on faster production to fuel its recovery and a way to keep pace with rival Airbus (FRA:AIR) which has taken advantage of the company’s woes in the past few years.

To sum up, it seems Boeing is positioned to continue its recovery further after years of struggling.

And that’s good news for Astronics (ATRO), a firm that specializes in manufacturing electronic equipment for both commercial and military aircraft. 

Astronics provides a wide range of equipment and related solutions, including aircraft power systems, connectivity and data management, exterior and interior lighting, safety systems, cabin interiors, and other related equipment.

The company enjoys 92% market share in the aerospace segment, with roughly 69% of its sales coming from commercial aerospace.

Boeing has been a key customer for Astronics. From 2012 to 2019, this relationship has helped the latter generate stable returns. 

As a result, when Boeing faced regulatory scrutiny and production slowed, Astronics’ returns took a significant hit.

Astronics’ Uniform return on assets (“ROA”) nosedived from 13% in 2018 to -5% in 2020. From that year until 2023, returns trended negatively. This changed when returns inflected positive in 2024—the same year Boeing started to recover.

Since we first highlighted this company in September last year, Astronics’ shares have risen 80% thanks in large part to Boeing’s own recovery.

As Boeing continues to put its production issues behind it and regains the ground it has lost in recent years, Astronics’ returns could continue rebounding to historical levels, positioning it to provide more upside for investors. 

Best regards,

Joel Litman & Rob Spivey
Chief Investment Officer &
Director of Research
at Valens Research

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