Air Industries Receives $5.9 Million US Air Force Contract for Aircraft Flight Control Assemblies

The broad market exchange-traded fund SPDR S&P 500 ETF Trust was down 1.1% and the actively traded Invesco QQQ Trust retreated 1.7% in Friday's premarket activity amid investors' focus on the upcoming inflation report.

US stock futures were also lower, with S&P 500 Index futures down 1%, Dow Jones Industrial Average futures slipping 0.5%, and Nasdaq futures losing 1.6% before the start of regular trading.

November data on Personal Income and Outlays in the US will be released at 8:30 am ET.

The consumer sentiment report will be released at 10 am ET and the Baker Hughes rig count at 1 pm ET.

In premarket activity, bitcoin was down by 3.1% and the cryptocurrency fund ProShares Bitcoin Strategy ETF was 2.5% lower.

Power Play:

Health Care

The Health Care Select Sector SPDR Fund was up 0.6%. The Vanguard Health Care Index Fund gained 0.3% while the iShares US Healthcare ETF advanced 0.3%. The iShares Biotechnology ETF was down 0.6%.

Aadi Bioscience shares were up more than 24% premarket Friday after the company said it signed an exclusive license agreement for a portfolio of preclinical antibody-drug conjugates and entered into deals that will raise up to $200 million.

Winners and Losers:

Industrial

Industrial Select Sector SPDR Fund lost 0.4% while the Vanguard Industrials Index Fund gained marginally by 0.04% and the iShares US Industrials ETF (IYJ) was up 0.02%.

Air Industries Group stock was up more than 8% before the opening bell after the company said it received an over $33 million, seven-year contract to develop components for the CH-53K King Stallion helicopter.

Consumer

The Consumer Staples Select Sector SPDR Fund was down 0.1%, while the Vanguard Consumer Staples Fund gained 0.3%. The iShares US Consumer Staples ETF was inactive, and the Consumer Discretionary Select Sector SPDR Fund lost 2.2%. The VanEck Retail ETF was inactive, while the SPDR S&P Retail ETF fell 1.2%.

Tesla shares were down nearly 5% pre-bell Friday after the National Highway Traffic Safety Administration said Thursday the electric vehicle maker is recalling 694,304 vehicles in the US over a problem with the tire pressure monitoring system that may improperly inflate tires, increasing the risk of accidents.

Technology

Technology Select Sector SPDR Fund retreated 1.7%, and the iShares US Technology ETF was down 1.6%, while the iShares Expanded Tech Sector ETF was 1.4% lower. Among semiconductor ETFs, SPDR S&P Semiconductor ETF fell nearly 1%, while the iShares Semiconductor ETF was down 1.8%.

NVIDIA shares were down more than 2% in recent Friday premarket activity after the European Commission unconditionally approved the company's proposed acquisition of Run:ai Labs.

Energy

The iShares US Energy ETF gained 0.3%, while the Energy Select Sector SPDR Fund was down by 0.1%.

Occidental Petroleum stock was up nearly 2% before Friday's opening bell after a regulatory filing showed that Berkshire Hathaway increased its stake in the company by purchasing about $409.2 million in shares over the last three days.

Financial

Financial Select Sector SPDR Fund retreated 0.4%. Direxion Daily Financial Bull 3X Shares fell 1.7%, while its bearish counterpart Direxion Daily Financial Bear 3X Shares was 1.4% higher.

KKR shares were down 1.7% pre-bell Friday after the company said Thursday it will extend its proposed takeover offer of 9,451 Japanese yen ($60.2) per share for Fuji Soft to Jan. 9.

Commodities

Front-month US West Texas Intermediate crude oil retreated 0.7% to $68.92 per barrel on the New York Mercantile Exchange. Natural gas gained 2.4% to reach $3.67 per 1 million British Thermal Units. United States Oil Fund declined by 0.3%, while the United States Natural Gas Fund rose by 0.4%.

Gold futures for February advanced 0.4% to $2,619.40 an ounce on the Comex, while silver futures fell 0.4% to $29.29 an ounce. SPDR Gold Shares advanced 0.3%, while the iShares Silver Trust was down by 0.8%.

Air Industries (AIRI) came out with a quarterly loss of $0.12 per share versus the Zacks Consensus Estimate of a loss of $0.02. This compares to loss of $0.40 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of -500%. A quarter ago, it was expected that this maker of parts for the aerospace industry and defense contractors would post a loss of $0.21 per share when it actually produced earnings of $0.09, delivering a surprise of 142.86%.

Over the last four quarters, the company has surpassed consensus EPS estimates two times.

Air Industries, which belongs to the Zacks Aerospace - Defense industry, posted revenues of $12.56 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 2.14%. This compares to year-ago revenues of $12.29 million. The company has topped consensus revenue estimates three times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Air Industries shares have added about 79.1% since the beginning of the year versus the S&P 500's gain of 25.5%.

What's Next for Air Industries?

While Air Industries has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Air Industries: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.08 on $14.73 million in revenues for the coming quarter and -$0.05 on $55.18 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Aerospace - Defense is currently in the top 34% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

AeroVironment (AVAV), another stock in the broader Zacks Aerospace sector, has yet to report results for the quarter ended October 2024.

This maker of unmanned aircrafts is expected to post quarterly earnings of $0.66 per share in its upcoming report, which represents a year-over-year change of -32%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

AeroVironment's revenues are expected to be $178.96 million, down 1% from the year-ago quarter.

Zacks Investment Research