Oct 30, 2026 earnings call — Aerospace and industrial revenue growth
Net sales grew 15.2% year over year to $525 million, and adjusted EPS rose 29.9% to $3.74.
Revenue $0.5B (est $0.5B) · EPS $3.74 (est $3.53) · Next-quarter revenue outlook $0.5B–$0.5B
Key quotes
"Across the A and D business, including space, we are seeing record order activity increasing inquiries, customer-- for customer requests for a dip act, accelerated deliveries and long term commitments."
"On marine, we continue to boost production of components for submarines and are working to triple our output on these products from our baseline."
"Performance remained strong during the period. With OEM revenues increasing 24.2% and distribution revenues increasing 10.6%."
Analyst Q&A 8
second-half outlook and marine timing
Q (Jason Olkam · Morgan Stanley): He asked why the company expects the second half to be better and for expected growth in industrials and aerospace & defense. He also asked whether the calendar 4Q logistical sign-offs relate to marine and when marine output might triple.
A: Management did not give a full quantitative second-half growth breakdown in this exchange. They later said the calendar 4Q logistical sign-offs are mostly aerospace, defense and space (not marine). On marine, they said the tripling depends on completing the insourcing project and that they expect to be past 70% next year, reach FY 2028 levels and round it off in FY 2029.
missiles demand and industrial cyclicality
Q (Jason Olkam · KeyBanc): He asked how much current missile and munitions activity is inventory replenishment versus structural production-rate increases, and what visibility management has. He also asked how big missiles & munitions are as a part of defense revenue, and about industrial OEM cyclicality (oil & gas, machinery exposure).
A: They said several missile programs (Tomahawk, GMLRS, Standard Missile and hypersonic) have stepped up build rates and they are preparing floor space to raise production accordingly. Hypersonic is still in testing and a manufacturing release is likely about 18 months away. Robert said missiles & munitions run about $50 million a year right now; on industrial cyclicality they see a pickup in oil & gas and have only limited machinery exposure.
second-source risk and marine capacity
Q (Steve Barger · Guggenheim): He asked if customers are looking to second-source components given higher demand, and whether marine capacity constraints are at legacy RBC or VACCO. He also asked for aerospace OEM growth this quarter and what is seen from Boeing/Airbus/engines.
A: They said they are not seeing a win-risk from being second sourced; talk of second sources often results in RBC being asked to be the second source. The marine capacity issue is mainly at legacy RBC (Tucson), while VACCO appears better able to triple production; they are retooling other RBC plants and expect to feel effects in the fourth quarter. Robert gave commercial OEM numbers: total commercial OEM was $114.9 million this quarter, distribution $21.5, defense OEM $67.5 and distribution $26.4, and they are seeing sequential OEM growth.
backlog, space growth, second-source timing
Q (Michael Ciarmoli · Deutsche Bank): He asked whether the sequential backlog increase was related to marine and asked for the split of space growth between organic and VACCO. He also asked how long it takes for a newly signed second-source contract to start showing up, and about primary tooling lead times and whether constraints will shift to labor.
A: They said the backlog increase was broad and mostly aerospace, with some from Sergeant marine and other aerospace contracts. VACCO makes up a large portion of the space growth though there was still a few million dollars of organic growth year-over-year. If added as a second source on a standard product, it could take about 50 weeks to phase in; primary machine-tool lead times include 6 months for turning machines, a year to 18 months for heat-treating, and about 15 months for finishing equipment, and labor is less of a constraint due to Mexico plant capacity.
Boeing rates and SG&A levels
Q (Scott Deuschle · Alembic Global): He asked for an update on Boeing production rates and whether RBC's rates track Boeing or include market-share gains. He also asked whether the quarter's low SG&A was one-time or part of a trend.
A: They said Boeing production they see is roughly in the low-to-mid 40s per month (about 42 to 45), and some RBC plants run higher due to taking business from exiting suppliers. On SG&A, they said this quarter showed strong execution and discipline, with leverage from higher sales, and cautioned next-quarter SG&A will be up partly due to stock compensation timing.
distribution growth and margin outlook
Q (Pete Skibitski · Raymond James): He asked why distribution grew nearly 11% when peers are slower — is it share gains, inventory build or pricing — and whether that growth is sustainable. He also asked how to think about inflationary cost pressures and gross margins for the back half.
A: They said a key advantage is very high in-stock service levels (roughly 95%-97%), so customers buy immediately when a part fails, which drives aftermarket revenue and distribution growth. On margins, they said they have worked to stay ahead of inflation and raised their full-year margin expansion outlook from 50 to 100 basis points, and they still feel 100 basis points is achievable.
M&A to fix supply chain weakness
Q (Tim Thein · BofA): He asked whether the company is pursuing M&A to vertically integrate weak parts of its supply chain and what categories look attractive for bolt-on deals.
A: They said they always evaluate insourcing supply-chain opportunities but it is not the main focus of M&A; they continue to delever and remain ready to pursue transactions. They prefer deals that add new products and technology to sell into their existing customer base and like defense, aerospace and industrial assets.
which OEM end markets drove growth; marine margin impact
Q (Andrew Steinberg · Deutsche Bank): He asked which industrial OEM end markets outperformed and whether the marine 'unlock' gives a margin benefit for aerospace & defense or just a revenue boost.
A: They said OEM strength was broad but mining and metals performed very well and semiconductor (small) was up significantly; the OEM business was up 24.6%. On marine, they said unlocking marine production is definitely a margin benefit — the marine business took a margin pinch of about 5 or 6 points this past quarter, so fixing that is impactful.