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The first-quarter 2023 earnings cycle has started for aerospace and defense stocks, with Lockheed Martin reporting better-than-expected earnings and sales. Some major industry players like Boeing (BA - Free Report) , General Dynamics (GD - Free Report) and Teledyne Technologies (TDY - Free Report) are set to report their results tomorrow.
Factors That Influenced Aerospace & Defense Stocks
Thanks to increasing passenger traffic witnessed across all regions since the beginning 2023, steady growth has been observed in global air travel demand lately. This in turn is expected to significantly boost the first-quarter results of aerospace and defense stocks, particularly those engaged in commercial aviation.
Evidently, Boeing witnessed a solid year-over-year surge of 36.8% in its commercial shipments during the first quarter. With Boeing being the nation’s largest jet maker, we expect the January-March quarter results of the remaining aerospace majors to reflect a similar improvement in delivery trends. Such solid deliveries must have boosted the overall top-line growth of the Aerospace sector, which houses all aerospace and defense stocks.
Stocks in this industry that are more focused on combat must have gained as a result of steady government support. Moreover, a steady order flow observed in the past couple of quarters, along with improving delivery trends in recent times, buoyed by recovering economic trends are projected to have bolstered the first-quarter revenues of aerospace and defense stocks.
However, persistent headwinds like supply-chain disruption, inflationary pressure along with some unfavorable project timing as the result of coronavirus might have adversely impacted the industry’s bottom-line performance.
Q1 Projections
The Aerospace sector’s earnings are expected to surge 12.9% from the prior-year quarter’s reported figure. Revenues are projected to improve 7.2%.
For more details on quarterly releases, you can go through the latest Earnings Preview.
Aerospace & Defense Stocks to Watch
Let's take a look at three defense companies that are scheduled to report first-quarter 2023 earnings on Apr 25 and find out how things have shaped up prior to the announcements.
Boeing’s first-quarter deliveries reflected a solid 36.8% surge in commercial shipments from the year-ago reported figure, while defense deliveries went up 2.4%. Such solid delivery numbers from manufacturing companies like Boeing are likely to contribute favorably to the jet maker’s overall first-quarter results.
This, along with a robust cargo market with several Boeing converted freighter and materials management agreements, is likely to have added an impetus to the company’s revenues. Abnormal costs in relation to the 787 program, along with periodic expenses, might have adversely impacted BA’s bottom-line performance (read more: Will Abnormal 787 Costs Hurt Boeing in Q1 Earnings?).
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Boeing currently has an Earnings ESP of -7.50% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
General Dynamics’ first-quarter results are expected to reflect dismal performance of most of its segments. Lower submarine engineering volume, coupled with the Virginia program’s supply-chain constraints, is likely to have negatively impacted Marine Systems segment’s results. Strengthening of the U.S. dollar against the euro and British pound might have hurt the Combat Systems unit’s revenues.
Moreover, supply chain challenges at Mission Systems business must have adversely impacted GD’s Technologies segment’s performance.
Teledyne’s first-quarter results are likely to reflect solid segmental performance from the majority of its business units. Higher sales of industrial and scientific vision systems, and high-resolution digital x-ray detectors are likely to have added impetus to the Digital Imaging segment’s revenues.
Increased sales of test and measurement instrumentation, marine instrumentation and environmental instrumentation are expected to have aided the Instrumentation segment’s revenues. Higher sales of energy systems and engineered products may have benefited Engineered Systems’ revenues.
Nevertheless, the dual impact of inflation as well as supply-chain constraints might have adversely impacted TDY’s earnings in the quarter under review.
Image: Bigstock
Aerospace & Defense Stocks Q1 Earnings Due Apr 26: BA, GD & TDY
The first-quarter 2023 earnings cycle has started for aerospace and defense stocks, with Lockheed Martin reporting better-than-expected earnings and sales. Some major industry players like Boeing (BA - Free Report) , General Dynamics (GD - Free Report) and Teledyne Technologies (TDY - Free Report) are set to report their results tomorrow.
Factors That Influenced Aerospace & Defense Stocks
Thanks to increasing passenger traffic witnessed across all regions since the beginning 2023, steady growth has been observed in global air travel demand lately. This in turn is expected to significantly boost the first-quarter results of aerospace and defense stocks, particularly those engaged in commercial aviation.
Evidently, Boeing witnessed a solid year-over-year surge of 36.8% in its commercial shipments during the first quarter. With Boeing being the nation’s largest jet maker, we expect the January-March quarter results of the remaining aerospace majors to reflect a similar improvement in delivery trends. Such solid deliveries must have boosted the overall top-line growth of the Aerospace sector, which houses all aerospace and defense stocks.
Stocks in this industry that are more focused on combat must have gained as a result of steady government support. Moreover, a steady order flow observed in the past couple of quarters, along with improving delivery trends in recent times, buoyed by recovering economic trends are projected to have bolstered the first-quarter revenues of aerospace and defense stocks.
However, persistent headwinds like supply-chain disruption, inflationary pressure along with some unfavorable project timing as the result of coronavirus might have adversely impacted the industry’s bottom-line performance.
Q1 Projections
The Aerospace sector’s earnings are expected to surge 12.9% from the prior-year quarter’s reported figure. Revenues are projected to improve 7.2%.
For more details on quarterly releases, you can go through the latest Earnings Preview.
Aerospace & Defense Stocks to Watch
Let's take a look at three defense companies that are scheduled to report first-quarter 2023 earnings on Apr 25 and find out how things have shaped up prior to the announcements.
Boeing’s first-quarter deliveries reflected a solid 36.8% surge in commercial shipments from the year-ago reported figure, while defense deliveries went up 2.4%. Such solid delivery numbers from manufacturing companies like Boeing are likely to contribute favorably to the jet maker’s overall first-quarter results.
This, along with a robust cargo market with several Boeing converted freighter and materials management agreements, is likely to have added an impetus to the company’s revenues. Abnormal costs in relation to the 787 program, along with periodic expenses, might have adversely impacted BA’s bottom-line performance (read more: Will Abnormal 787 Costs Hurt Boeing in Q1 Earnings?).
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Boeing currently has an Earnings ESP of -7.50% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The Boeing Company Price and EPS Surprise
The Boeing Company price-eps-surprise | The Boeing Company Quote
General Dynamics’ first-quarter results are expected to reflect dismal performance of most of its segments. Lower submarine engineering volume, coupled with the Virginia program’s supply-chain constraints, is likely to have negatively impacted Marine Systems segment’s results. Strengthening of the U.S. dollar against the euro and British pound might have hurt the Combat Systems unit’s revenues.
Moreover, supply chain challenges at Mission Systems business must have adversely impacted GD’s Technologies segment’s performance.
General Dynamics currently has an Earnings ESP of -0.41% and a Zacks Rank #3 (read more: Will Segment Sales Hurt General Dynamics' Q1 Earnings?). You can see the complete list of today’s Zacks #1 Rank stocks here.
General Dynamics Corporation Price and EPS Surprise
General Dynamics Corporation price-eps-surprise | General Dynamics Corporation Quote
Teledyne’s first-quarter results are likely to reflect solid segmental performance from the majority of its business units. Higher sales of industrial and scientific vision systems, and high-resolution digital x-ray detectors are likely to have added impetus to the Digital Imaging segment’s revenues.
Increased sales of test and measurement instrumentation, marine instrumentation and environmental instrumentation are expected to have aided the Instrumentation segment’s revenues. Higher sales of energy systems and engineered products may have benefited Engineered Systems’ revenues.
Nevertheless, the dual impact of inflation as well as supply-chain constraints might have adversely impacted TDY’s earnings in the quarter under review.
Teledyne currently has an Earnings ESP of +1.12% and a Zacks Rank #2 (read more: Will Segmental Sales Aid Teledyne's Earnings in Q1?).
Teledyne Technologies Incorporated Price and EPS Surprise
Teledyne Technologies Incorporated price-eps-surprise | Teledyne Technologies Incorporated Quote
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.