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Defense Stocks' Q3 Earnings Roster for Oct 24: BA, GD, NOC
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The defense space kick-started the Q3 earnings season with Textron (TXT - Free Report) releasing results on Oct 18. Notably, earnings of this multi-industry conglomerate fell short of the Zacks Consensus Estimate. Sector behemoth Lockheed Martin (LMT - Free Report) is scheduled to report its quarterly numbers today. In fact, majority of the defense giants are expected to release financial numbers this week.
As of Oct 19, 84 S&P 500 index members, accounting for 22.3% of the index’s total market capitalization, reported quarterly results. Earnings for these index members increased 19.2% year over year on 8.4% higher revenues. The S&P 500 companies are expected to witness bottom-line growth of 19.2% on 7.2% revenue rise.
By the end of this week, we expect to have a clear picture of the space’s performance as 154 of the index members are scheduled to release their financial numbers.
Coming to projections for the Zacks Aerospace sector, which constitute defense stocks, total Q3 earnings are expected to increase 16.8% year over year on 6.8% higher revenues, as of Oct 17. For more details on quarterly releases, you can go through the Earnings Preview.
Defense stocks, which have been on a growth trajectory for the past couple of quarters, courtesy of President Trump’s favored stance toward increased spending on the nation’s defense, saw a thriving Q3. On Jul 12, Trump said that NATO allies agreed to raise their defense spending to 2% of their GDP by 2024. This led to a rally in defense stocks on the following day, leading to a rebound in the markets reeling under trade war fears. Meanwhile, a steady flow of contracts from the Pentagon continued to provide impetus to the stocks. Defense contractors also received a string of key contracts from foreign allies of the United States, hinting at growing international market for weaponries.
Let’s take a look at three defense majors — The Boeing Company (BA - Free Report) , General Dynamics Corp. (GD - Free Report) and Northrop Grumman Corporation (NOC - Free Report) — all of which are scheduled to release Q3 results before the opening bell on Oct 24.
Boeing delivered a positive earnings surprise of 2.78% in the last reported quarter. Notably, the company outperformed the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 27.73%.
Boeing enjoys a solid inflow of contracts from the Pentagon as well as foreign allies, courtesy of the company’s varied product offerings. Such solid order growth must have boosted Boeing’s backlog count, which should get duly reflected in the upcoming quarterly results.
However, the company’s commercial and defense deliveries both declined in the third quarter, when compared with the last year’s equivalent figure. Such lower deliveries tend to drag down a company’s quarterly sales.
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chance of beating estimates if it also has a positive Earnings ESP. Impressively, Boeing constitute that right combination. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company has an Earnings ESP of +0.39% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Please note that 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 (read more: Will Commercial Margin Growth Aid Boeing's Q3 Earnings?).
General Dynamics delivered a positive earnings surprise of 13.25% in the last reported quarter. The company outperformed the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 7.43%.
Keeping up with the usual trend, the company acquired a string of significant contracts in the third quarter. Such impressive contract wins are likely to boost total revenues in the to-be-reported quarter.
General Dynamics’ Gulfstream G500 received both its type certification and production certificate from the U.S. Federal Aviation Administration (“FAA”), at the early stage of the to-be-reported quarter. These certifications may have led to a handful of deliveries of G500 by the company, which in turn should boost the quarterly sales.
Northrop Grumman delivered a positive earnings surprise of 2.61% in the last reported quarter. The company outperformed the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 11.79%.
The completion of the Orbital ATK buyout will boost Northrop Grumman’s third-quarter results. Moreover, the company’s assets are well aligned to meet customers’ current and future needs, which will increase booking as well as boost backlog.
Additionally, Northrop Grumman’s Aerospace Systems is anticipated to be the major top-line contributor in the soon-to-be-reported quarter, similar to the second quarter.
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Defense Stocks' Q3 Earnings Roster for Oct 24: BA, GD, NOC
The defense space kick-started the Q3 earnings season with Textron (TXT - Free Report) releasing results on Oct 18. Notably, earnings of this multi-industry conglomerate fell short of the Zacks Consensus Estimate. Sector behemoth Lockheed Martin (LMT - Free Report) is scheduled to report its quarterly numbers today. In fact, majority of the defense giants are expected to release financial numbers this week.
As of Oct 19, 84 S&P 500 index members, accounting for 22.3% of the index’s total market capitalization, reported quarterly results. Earnings for these index members increased 19.2% year over year on 8.4% higher revenues. The S&P 500 companies are expected to witness bottom-line growth of 19.2% on 7.2% revenue rise.
By the end of this week, we expect to have a clear picture of the space’s performance as 154 of the index members are scheduled to release their financial numbers.
Coming to projections for the Zacks Aerospace sector, which constitute defense stocks, total Q3 earnings are expected to increase 16.8% year over year on 6.8% higher revenues, as of Oct 17. For more details on quarterly releases, you can go through the Earnings Preview.
Defense stocks, which have been on a growth trajectory for the past couple of quarters, courtesy of President Trump’s favored stance toward increased spending on the nation’s defense, saw a thriving Q3. On Jul 12, Trump said that NATO allies agreed to raise their defense spending to 2% of their GDP by 2024. This led to a rally in defense stocks on the following day, leading to a rebound in the markets reeling under trade war fears. Meanwhile, a steady flow of contracts from the Pentagon continued to provide impetus to the stocks. Defense contractors also received a string of key contracts from foreign allies of the United States, hinting at growing international market for weaponries.
Let’s take a look at three defense majors — The Boeing Company (BA - Free Report) , General Dynamics Corp. (GD - Free Report) and Northrop Grumman Corporation (NOC - Free Report) — all of which are scheduled to release Q3 results before the opening bell on Oct 24.
Boeing delivered a positive earnings surprise of 2.78% in the last reported quarter. Notably, the company outperformed the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 27.73%.
Boeing enjoys a solid inflow of contracts from the Pentagon as well as foreign allies, courtesy of the company’s varied product offerings. Such solid order growth must have boosted Boeing’s backlog count, which should get duly reflected in the upcoming quarterly results.
However, the company’s commercial and defense deliveries both declined in the third quarter, when compared with the last year’s equivalent figure. Such lower deliveries tend to drag down a company’s quarterly sales.
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has good chance of beating estimates if it also has a positive Earnings ESP. Impressively, Boeing constitute that right combination. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company has an Earnings ESP of +0.39% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Please note that 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 (read more: Will Commercial Margin Growth Aid Boeing's Q3 Earnings?).
The Boeing Company Price and EPS Surprise
The Boeing Company Price and EPS Surprise | The Boeing Company Quote
General Dynamics delivered a positive earnings surprise of 13.25% in the last reported quarter. The company outperformed the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 7.43%.
Keeping up with the usual trend, the company acquired a string of significant contracts in the third quarter. Such impressive contract wins are likely to boost total revenues in the to-be-reported quarter.
General Dynamics’ Gulfstream G500 received both its type certification and production certificate from the U.S. Federal Aviation Administration (“FAA”), at the early stage of the to-be-reported quarter. These certifications may have led to a handful of deliveries of G500 by the company, which in turn should boost the quarterly sales.
General Dynamics has an Earnings ESP of -0.09% and a Zacks Rank #3, which makes surprise prediction difficult (read more: Will Robust Order Fuel General Dynamics' Q3 Earnings?).
General Dynamics Corporation Price and EPS Surprise
General Dynamics Corporation Price and EPS Surprise | General Dynamics Corporation Quote
Northrop Grumman delivered a positive earnings surprise of 2.61% in the last reported quarter. The company outperformed the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 11.79%.
The completion of the Orbital ATK buyout will boost Northrop Grumman’s third-quarter results. Moreover, the company’s assets are well aligned to meet customers’ current and future needs, which will increase booking as well as boost backlog.
Additionally, Northrop Grumman’s Aerospace Systems is anticipated to be the major top-line contributor in the soon-to-be-reported quarter, similar to the second quarter.
Northrop Grumman has an Earnings ESP of -0.58% and a Zacks Rank #2. Therefore, our model does not show that the company is likely to beat estimates this quarter (read more: Northrop Grumman to Report Q3 Earnings: What's in the Cards?).
Northrop Grumman Corporation Price and EPS Surprise
Northrop Grumman Corporation Price and EPS Surprise | Northrop Grumman Corporation Quote
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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