Magellan Aerospace profit jumps 57.7% in third quarter as revenue rises 17.6%
Key Facts
Magellan Aerospace said net income rose 57.7% year over year to C$19.975 million in the third quarter ended September 30, 2026, while revenue increased 17.6% to C$300.622 million. Net income per share was C$0.35, compared with C$0.22 in the same period of 2025. Profit growth outpaced sales growth, alongside an improvement in gross margin and higher cash generated from operations. The company said higher volumes and pricing, as well as a better product mix, supported quarterly performance. It also noted that higher costs for materials and purchased supplies partly limited the improvement in profitability.
Gross profit was C$44.076 million, up from C$32.620 million a year earlier, and its share of revenue rose to 14.7% from 12.8%. Magellan attributed the improvement to higher volumes and pricing and a better product mix, partly offset by higher prices for materials and purchased supplies. By comparison, quarterly revenue was below the C$305.6 million recorded in the second quarter of 2026, but exceeded C$255.7 million in the third quarter of 2025. The company said foreign-exchange movements supported reported revenue; had currencies remained at their third-quarter 2025 levels, revenue for the period would have been C$4.2 million lower. The year-over-year comparison therefore reflects increased activity, while reported value was also affected by currency movements.
By market, revenue in Canada rose 7.8% to C$103.159 million, with the company attributing the increase mainly to higher revenue from casting products. In the first nine months of 2026, 66.9% of Magellan’s revenue came from commercial markets, compared with 33.1% from defense markets. Total revenue for the nine months ended September 30 was C$891.306 million, up 16.3% from C$766.357 million in the corresponding period of 2025. Net income for the period also rose to C$56.282 million from C$28.861 million, a year-over-year increase of 95.0%. The results place the quarter’s performance within a broader growth trend in sales and profit since the start of the year.
On costs, third-quarter other expenses included C$2.3 million, mostly legal and administrative expenses related to Chapter 11 protection proceedings for Magellan Aerospace, Middletown. The subsidiary had filed for voluntary protection on July 22, 2026. Magellan said this followed a decline in its core business activity and higher legal and environmental spending related to legacy environmental obligations. At the same time, operating activities generated C$36.4 million in cash during the quarter, compared with C$4.5 million in the third quarter of 2025. The company attributed part of the increase to higher contract liabilities related to the timing of customer payments.
Magellan announced on October 27 that it had signed a memorandum of understanding with Saab to explore manufacturing advanced structures, composite structures and structural assemblies in Canada. The initiative is tied to the Canadian government’s selection of the Gripen aircraft as part of the Royal Canadian Air Force’s future fighter capabilities. Saab said it plans to work with CAE, IMP and Magellan as its main Canadian industrial partners if the Gripen E is selected. Potential work packages include production of complex structural units and composite wing skins, along with engineering, manufacturing and industrial activities related to external fuel tanks. The scope of work and any future allocation remain subject to an additional agreement and a Canadian procurement decision, so the memorandum alone does not confirm production contracts.
The company declared a cash distribution of C$0.05 per share, payable on December 31, 2026, to shareholders of record on December 17. The move follows nine-month results showing higher revenue and net income than in the corresponding period a year earlier. The distribution announcement is separate from the potential industrial opportunity tied to the Saab memorandum, which depends on the government’s decision on Gripen and a subsequent agreement defining the work. The quarterly results combine sales growth, margin improvement and higher operating cash, alongside continuing legal and administrative costs related to the Middletown proceedings. The distribution is scheduled to be paid on the announced date at the end of December.