Defense contractor CPI Aerostructures Inc. reported Tuesday that first-quarter earnings swung to a profit and that indications from Washington suggest the wing replacement program for the A-10 Warthog attack jet could continue under new terms.
Shares of CPI Aero rocketed 22.8 percent to close Tuesday at $7 on the New York Stock Exchange.
In August 2014, the Edgewood company announced a $44.7 million noncash charge related to plans by the military to retire the A-10, sending the company’s stock tumbling. CPI Aero serves as a subcontractor to Boeing Co. on the wing replacement program.
In a statement, Douglas McCrosson, CPI Aero’s president and chief executive, said the Defense Department’s 2017 spending bill contains funding earmarked for A-10 wing replacement and includes language that prevents the U.S. Air Force from using funds to retire the aircraft.
“We believe this bodes very well for the continuation of our A-10 wing replacement program under new terms that should result in a profitable opportunity for CPI Aero” in 2018, he said.
For the quarter ended March 31, CPI Aero posted revenue of $20 million, compared with $12.7 million in the 2016 quarter. Net income was $1.2 million, or 14 cents per diluted share, versus a net loss of $9.2 million, or $1.07 per diluted share, in the year-earlier quarter.
“Revenue in the first quarter was driven by the Northrop Grumman E-2D, Gulfstream G650, HondaJet and the F-16 maintenance, repair and overhaul program,” McCrosson said. “Revenue and gross margin benefited from shipments of F-16 components that the customer requested earlier than planned.”