HONAHONA

In its first report since spinning off as an independent company, results fell short of what analysts expected. Sales reached $4.52 billion and earnings were $1.87 per share, both missing targets. The stock fell about 17 percent as management lowered its full-year growth outlook to roughly 5 percent, down from a previous 8 percent estimate.

Shortages of critical parts and labor are preventing the company from turning its massive $18 billion backlog into revenue. While demand for aircraft parts remains high, these supply chain bottlenecks are a serious hurdle. For a long-term owner, the core business of servicing 90 percent of the world's fleet is still intact, but these operational struggles are delaying the expected profit recovery.

See the full quarter, and how our tracked metrics did

Source: 8-K filing

SEC filing on 2026-08-05: 8-K, 8-K filing: reported results; executive or director change; other event the company deems important.

Source: 8-K filing

Key highlights

• Full year growth revised lower: The company cut its organic sales growth target to a range of 4% to 5%, down from the previous goal of 7% to 9%, as management aligns its outlook with the limited output capacity of its current supply chain. Profit expectations were also lowered to a range of $4.35 billion to $4.45 billion in adjusted earnings before interest and taxes, which is the money earned from core operations.
• Profit margins squeezed by costs: Adjusted earnings before interest and taxes, which measures the profit from running the business, fell 7% to $995 million. This decline happened because $100 million in one-time costs related to the company's recent spin-off and old inventory charges outweighed the gains from higher sales prices.
• Backlog hits new record: The total value of signed orders for future work reached $18.2 billion, a 9% increase over last year. This growth was led by the Defense and Space division and provides a stable pipeline for a company that just became an independent business.
• Defense and Space facing hurdles: Sales in the Defense and Space division grew by only 3% to $1.8 billion, a slower pace than other segments due to parts shortages and the end of a specific government project. This is a critical area for the company's long-term health as it represents about 40% of total quarterly revenue.
• Supply chain investments accelerating: To fix production delays, the company is qualifying 50 new suppliers in the second half of the year and increasing its spending on specialized factory tools by 20%. These actions are meant to resolve the supply constraints that limited sales growth to 5% this quarter despite high customer demand.

Our take: This was a soft quarter defined by the growing pains of becoming an independent company. While the record $18.2 billion backlog shows that customers still want the product, the lowered full year growth outlook to 5% at most proves that supply chain struggles are holding back the business. We still see a healthy long-term path, but the company must prove it can turn those orders into actual shipments before the investment case regains its full strength.