Can ATRO sustain its Q4 earnings growth?

**Astronics Corporation (ATRO) may face challenges in sustaining its Q4 earnings growth** due to several factors: 1. **Boeing Strike Impact**: The company's bookings were negatively affected by the Boeing strike, which hurt revenues in both Q3 and Q4 2024. The strike posed a significant risk to ATRO's growth, and its impact on bookings was approximately $7-$8 million. This disruption in production could have a lasting effect on ATRO's earnings if not adequately mitigated. 2. **Legal Expenses and Restructuring Charges**: ATRO incurred substantial legal expenses and restructuring charges, including $12 million in atypical SG&A costs and a $4.8 million increase in their legal settlement reserve due to a patent infringement dispute in the U.K. These expenses, although one-time in nature, can significantly impact quarterly earnings and may not be easily sustainable. 3. **Test Segment Performance**: The Test segment experienced weak performance, with restructuring charges and anticipated weak first-half results for 2025. This suggests that the segment may not contribute positively to earnings growth in the near term. 4. **Market Conditions and Competition**: The aerospace sector is highly competitive, and ATRO faces challenges from other industry players. The sector has seen significant changes, such as the impact of the war in Ukraine on demand and supply chains, which can affect ATRO's market position and earnings. In conclusion, while ATRO's Q4 performance was strong, with record aerospace sales and significant positive cash flow, the company's ability to sustain this growth may be hindered by the aforementioned factors. Investors should monitor these issues closely to assess the company's future earnings prospects.