Park Aerospace Corp. (PKE) Q2 2026 Earnings Call Transcript
Sales $16.381 million, a slight increase from the previous quarter's estimate of $15 million to $16 million. The increase was attributed to higher-than-expected sales of C2B fabric and other materials.
Gross Profit $5.116 million, with a gross margin of 31.2%. The gross margin was impacted by the sales mix, including a higher proportion of low-margin C2B fabric sales, and ongoing expenses related to the new manufacturing facility.
Adjusted EBITDA $3.401 million, with an adjusted EBITDA margin of 20.8%. This was at the higher end of the company's estimate of $3 million to $3.4 million, driven by better-than-expected sales performance.
C2B Fabric Sales $1.65 million in Q2. The sales were driven by defense industry customers stockpiling the fabric, which led to a higher ratio of fabric sales compared to materials manufactured with the fabric, negatively impacting margins.
Ablative Materials Sales $415,000 in Q2. These materials, manufactured with C2B fabric, have very high margins, partially offsetting the impact of low-margin fabric sales.
Missed Shipments $510,000 in Q2, significantly higher than previous quarters. The increase was due to customer certification and testing delays, rather than international shipment issues.
Cash and Marketable Securities $61.6 million at the end of Q2, down from $65.6 million in Q1. The decrease was primarily due to a $4.9 million transition tax installment payment.
Patriot Missile System Revenue Significant revenue potential as the company is sole-source qualified for specialty ablative materials used in the system. The Department of War is pushing for a quadrupling of production to 2,000 missiles per year, which would greatly benefit Park.
GE Aerospace Jet Engine Program Sales $7.5 million in Q2, slightly above the forecasted range of $6.7 million to $7.2 million. The increase was attributed to higher-than-expected production and sales alignment.
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- Walmart Market Performance: Walmart's stock increased by 25.7% in the last six months, surpassing the supermarket industry's 23.4%, with robust execution of its omnichannel model and e-commerce growth driving performance, while management's optimistic outlook for fiscal 2026 underscores confidence in sustained growth.
- JPMorgan's Strong Business: JPMorgan's shares gained 8.4% over the past six months, despite asset quality concerns, as strong investment banking performance and loan demand will support net interest income expansion, projected to increase by approximately 7% in 2026.
- Park Aerospace Company Performance: Park Aerospace's stock rose 27.7% in the last six months, with a market cap of $499.94 million and a 40-year uninterrupted dividend history, focusing on high-complexity components, although risks include customer concentration and geopolitical uncertainty.
- Significant Earnings Growth: Park Aerospace reported earnings of $0.15 per share and sales of $17.3 million in Q3 2026, reflecting a 20% year-over-year sales increase, which boosts market confidence in the aerospace composite materials sector.
- Improved Profitability: The nearly doubled earnings per share from $0.08 last year indicate substantial progress in cost management and market demand, potentially attracting more investor interest moving forward.
- Annual Performance Outlook: With a year-to-date earnings per share of $0.37, if Park maintains the growth momentum seen in Q3, it could achieve an annual earnings target of $0.50, enhancing future profitability expectations.
- Stock Dilution Risk: The company announced plans to sell $150 million in common stock with attached warrants, which could dilute existing shareholders but also provide necessary funding for future growth strategies, warranting investor attention to this potential risk.

- Strong Sales Performance: Park Aerospace reported Q3 2026 sales of $17.3 million, up from $16.4 million in Q2, indicating robust demand in the aerospace sector and positive signals of market recovery.
- EBITDA Exceeds Expectations: Adjusted EBITDA reached $4.228 million with a margin of 24.4%, reflecting successful cost control and highlighting the growth potential in high-margin product sales.
- New Plant Expansion Plans: The company announced a $50 million investment to build a new composite materials manufacturing plant, expected to double current capacity to meet rising demand from aerospace and missile system projects, further solidifying its market position.
- Optimistic Long-Term Outlook: Management forecasts full-year sales between $72.5 million and $73.5 million, with a long-term composite materials sales outlook of approximately $200 million, demonstrating confidence in future market opportunities and strategic positioning.
- Significant Earnings Growth: Park Aerospace's Q3 earnings reached $2.95 million, translating to an EPS of $0.15, which marks a substantial increase from last year's $1.58 million and $0.08 EPS, indicating improved profitability.
- Strong Revenue Increase: The company's revenue for the third quarter was $17.33 million, up 20.3% from $14.41 million last year, reflecting robust market demand and business expansion.
- Improved Market Performance: The dual growth in revenue and earnings further solidifies Park Aerospace's market position in the aerospace sector, enhancing investor confidence in the company's future prospects.
- Enhanced Financial Health: The ongoing earnings and revenue growth strengthen the company's financial health, providing a solid foundation for future investments and expansion efforts.
- Financial Highlights: Park Aerospace reported a GAAP EPS of $0.15 for Q3, with revenues reaching $17.33 million, indicating stable growth in the aerospace sector and boosting investor confidence.
- Adjusted EBITDA Growth: The adjusted EBITDA for the third quarter of fiscal year 2026 was $4.226 million, a 75% increase from $2.415 million in the same quarter of fiscal year 2025, reflecting significant improvements in operational efficiency.
- Year-to-Date Comparison: For the first nine months of fiscal year 2026, adjusted EBITDA reached $10.59 million, up 28.7% from $8.231 million in the same period of fiscal year 2025, indicating enhanced profitability.
- Quarter-over-Quarter Analysis: Compared to the second quarter of fiscal year 2026, which had an adjusted EBITDA of $3.401 million, the third quarter saw a 24.5% increase, demonstrating strong performance amid recovering market demand.








