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What's in Store for L3 Technologies (LLL) in Q1 Earnings?
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L3 Technologies, Inc. is scheduled to release first-quarter 2017 results before the opening bell on Apr 27.
Last quarter, the company posted an earnings surprise of 12.26%. It is worth noting that the company surpassed the Zacks Consensus Estimate in all the trailing four quarters, with an average beat of 14.99%.
Let’s see how things are shaping up at the company prior to this announcement.
Factors at Play
L3 Technologies is engaged in transforming its business portfolio to bring more focus to defense electronics, communications and ISR markets where it enjoys leading positions. In line with this strategy, the company completed the acquisition of Implant Sciences’ explosives trace detection (ETD) assets, at the onset of the first quarter.
Implant Sciences’ strong domain expertise and technical capabilities in innovative tracing solutions will aid L3 Technologies strategic growth initiatives. It has developed state-of-the-art trace detection technologies, which will significantly boost L3 Technologies’ sensor portfolio; apart from expanding its foothold in the global aviation security and national security markets. With airports and other authorities demanding more invasive threat detection solutions, we expect the company’s revenue to get a boost from this acquisition.
Among other highlights of the fourth quarter, L-3 Technologies won a contract valued at more than $115 million by HNA Group’s Hainan Sky Plumage Flight Training Co., Ltd to provide 11 full flight simulators and auxiliary training equipment over the next 18 months.
The company also increased its regular quarterly cash dividend, in the first quarter, from 70 cents to 75 cents per share. This indicates the solid cash balance position the company boasts, probably driven by significant contracts it secures from both governments and commercial companies for its diversified product line. This dividend hike is also in line with L3 Technologies’ commitment to deliver significant value to its shareholders over the long haul.
Moreover, on the international frontier, the company continues to expand its footprint in key markets, particularly the Middle East and Asia, by adding resources and personnel to address opportunities and better serve its customers. We expect its yet-to-be reported quarter’s result to duly reflect such initiatives.
On the flip side, management expects the company to witness year-over-year lower margins at its Aerospace Systems business unit during the first quarter.
Overall for first quarter of 2017, L3 Technologies expects sales to be in the range of 2.4 billion–2.5 billion, reflecting 2% organic growth. However, free cash outflow is expected in the range of 50 million–100 million, owing to the accelerated cash receipts that the company got in the fourth quarter of 2016.
For the first quarter, the Zacks Consensus Estimate for earnings is pegged at $1.81, down 12.98% year over year, while the consensus for revenues is pegged at $2.46 billion, implying a 4.66% year-over-year improvement.
L-3 Communications Holdings, Inc. Price and EPS Surprise
Our proven model does not conclusively show that L3 Technologies is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below.
Zacks ESP: L3 Technologies has an Earnings ESP of -1.11%. This is because the Most Accurate estimate is pegged at $1.79, lower than the Zacks Consensus Estimate of $1.81. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: L3 Technologies carries a Zacks Rank #2, which increases the predictive power of ESP. However, the negative ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are a few stocks in the Aerospace and Defense space worth considering on the basis of our model which shows that they have the right combination to pull off a beat:
Lockheed Martin Corp. (LMT - Free Report) is expected to report first-quarter 2017 results on Apr 25. The company has an Earnings ESP of +2.90% and a Zacks Rank #2.
Raytheon Company is expected to report first-quarter 2017 results on Apr 27. The company has an Earnings ESP of +1.24% and a Zacks Rank #3.
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Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.Click here for the 6 trades >>
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What's in Store for L3 Technologies (LLL) in Q1 Earnings?
L3 Technologies, Inc. is scheduled to release first-quarter 2017 results before the opening bell on Apr 27.
Last quarter, the company posted an earnings surprise of 12.26%. It is worth noting that the company surpassed the Zacks Consensus Estimate in all the trailing four quarters, with an average beat of 14.99%.
Let’s see how things are shaping up at the company prior to this announcement.
Factors at Play
L3 Technologies is engaged in transforming its business portfolio to bring more focus to defense electronics, communications and ISR markets where it enjoys leading positions. In line with this strategy, the company completed the acquisition of Implant Sciences’ explosives trace detection (ETD) assets, at the onset of the first quarter.
Implant Sciences’ strong domain expertise and technical capabilities in innovative tracing solutions will aid L3 Technologies strategic growth initiatives. It has developed state-of-the-art trace detection technologies, which will significantly boost L3 Technologies’ sensor portfolio; apart from expanding its foothold in the global aviation security and national security markets. With airports and other authorities demanding more invasive threat detection solutions, we expect the company’s revenue to get a boost from this acquisition.
Among other highlights of the fourth quarter, L-3 Technologies won a contract valued at more than $115 million by HNA Group’s Hainan Sky Plumage Flight Training Co., Ltd to provide 11 full flight simulators and auxiliary training equipment over the next 18 months.
The company also increased its regular quarterly cash dividend, in the first quarter, from 70 cents to 75 cents per share. This indicates the solid cash balance position the company boasts, probably driven by significant contracts it secures from both governments and commercial companies for its diversified product line. This dividend hike is also in line with L3 Technologies’ commitment to deliver significant value to its shareholders over the long haul.
Moreover, on the international frontier, the company continues to expand its footprint in key markets, particularly the Middle East and Asia, by adding resources and personnel to address opportunities and better serve its customers. We expect its yet-to-be reported quarter’s result to duly reflect such initiatives.
On the flip side, management expects the company to witness year-over-year lower margins at its Aerospace Systems business unit during the first quarter.
Overall for first quarter of 2017, L3 Technologies expects sales to be in the range of 2.4 billion–2.5 billion, reflecting 2% organic growth. However, free cash outflow is expected in the range of 50 million–100 million, owing to the accelerated cash receipts that the company got in the fourth quarter of 2016.
For the first quarter, the Zacks Consensus Estimate for earnings is pegged at $1.81, down 12.98% year over year, while the consensus for revenues is pegged at $2.46 billion, implying a 4.66% year-over-year improvement.
L-3 Communications Holdings, Inc. Price and EPS Surprise
L-3 Communications Holdings, Inc. Price and EPS Surprise | L-3 Communications Holdings, Inc. Quote
Earnings Whispers
Our proven model does not conclusively show that L3 Technologies is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below.
Zacks ESP: L3 Technologies has an Earnings ESP of -1.11%. This is because the Most Accurate estimate is pegged at $1.79, lower than the Zacks Consensus Estimate of $1.81. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: L3 Technologies carries a Zacks Rank #2, which increases the predictive power of ESP. However, the negative ESP makes surprise prediction difficult.
Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks that Warrant a Look
Here are a few stocks in the Aerospace and Defense space worth considering on the basis of our model which shows that they have the right combination to pull off a beat:
Lockheed Martin Corp. (LMT - Free Report) is expected to report first-quarter 2017 results on Apr 25. The company has an Earnings ESP of +2.90% and a Zacks Rank #2.
Leidos Holdings, Inc. (LDOS - Free Report) is expected to report first-quarter 2017 results on May 4. The company has an Earnings ESP of +1.28% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Raytheon Company is expected to report first-quarter 2017 results on Apr 27. The company has an Earnings ESP of +1.24% and a Zacks Rank #3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.Click here for the 6 trades >>