Aerojet Rocketdyne Holdings, Inc. (NYSE: AJRD), a creator and producer of rocket engines, issued a report that fell short of expectations, causing stock prices to decline. The rationale is a single rocket engine, which might eventually become a growth driver.
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Last quarter, Aerojet Rocketdyne Holdings, Inc. (AJRD)’s net sales topped $528 million, with a profit of $16.4 million. This is down from a year ago, and the major cause is the delay in the start of mass manufacturing of RS-25 rocket engines.
NASA ordered these engines in 2020 for the SLS heavy launch vehicle. The overall value of the deal is around $1.8 billion, which is quite expensive for the US government space program.
The initial SLS rockets will be powered by RS-25 engines salvaged from shuttles. However, by the time regular flights begin, NASA should have a steady supply of fresh engines. This is where Aerojet Rocketdyne Holdings, Inc. (AJRD) is having difficulty: supply chain concerns are delaying the test program and the launch of the new RS-25s.
Large engines for big rockets have not been built since the period of the enormous programs. SpaceX is the sole exception since it is testing new Raptor 2 engines for its Starship super-heavy transport system. However, SpaceX is unlikely to sell its engines since its production capacity is insufficient for its own programs. As a result, Aerojet Rocketdyne Holdings, Inc. (AJRD) is the sole corporation capable of assisting the US government in realizing next-generation space megaprojects.
Because the RS-25 engine isn’t very complicated or creative, Aerojet Rocketdyne Holdings, Inc. (AJRD) will almost surely be able to produce one, and the revelation may boost the company’s stock.
The stock has a year-to-date performance of -12.51 percent. Its seven-day performance, on the other hand, is 0.96 percent. The stock price index has grown by 0.12 percent in the last month and by 0.05 percent in the last three months. Its six-month performance was 10.42 percent, while its 52-week performance was -11.83 percent.
