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Aerojet Rocketdyne's (AJRD) Q1 Earnings Beat, Improve Y/Y

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Aerojet Rocketdyne Holdings, Inc. reported first-quarter 2019 adjusted earnings of 44 cents per share, which surpassed the Zacks Consensus Estimate of 31 cents by 41.9%. The bottom line also improved 100% year over year from 22 cents registered in the year-ago quarter.

Barring one-time adjustments, the company reported GAAP earnings of 47 cents per share, reflecting a solid improvement of 161.1% from 18 cents recorded in the prior-year quarter. This upside can be attributed to lower cost of sales and increased operating income in the quarter under review.

Operational Performance

The company’s first-quarter revenues of $491.7 million were almost in line with the year-ago quarter’s figure. However, the top line exceeded the Zacks Consensus Estimate of $487 million by 0.9%.

Aerojet Rocketdyne’s total backlog at the end of first quarter 2019 totaled $3.8 billion, lower than $4.1 billion registered at the end of 2018. Of this, funded backlog amounted to $1.8 billion compared with $1.9 billion at 2018 end.

Total operating expenses declined 45% to $11.5 million in the first quarter. Meanwhile, operating income of $63.3 million improved a solid 59.8% from $39.6 million a year ago.

Segmental Performance

Aerospace & Defense: Revenues at this segment remained flat year over year at $490 million owing to an increase in defense programs’ net sales primarily driven by the Patriot Advanced Capability-3 (PAC-3) program. However, a decrease in space programs net sales affected the segment’s top line.

The segment’s margin expanded 720 basis points (bps) to 14.2%.

Real Estate: The segment generated revenues of $1.7 million compared with the year-ago quarter’s figure of $1.6 million.

Financial Update

Aerojet Rocketdyne exited the first quarter with cash and cash equivalents of $706.6 million, down from $735.3 million as of Dec 31, 2018.

Long-term debt amounted to $367.9 million, up from $352.3 million as of Dec 31, 2018.

Operating cash outflow from continuing operations summed $17.7 million as of Mar 31, 2019, compared with cash outflow of $95.4 million in the year-ago period.

Free cash flow at the end of reported quarter was $19.2 million compared with free cash flow of $99.5 million a year ago.

Zacks Rank

Aerojet Rocketdyne currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Textron Inc. (TXT - Free Report) reported first-quarter 2019 earnings from continuing operations of 76 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 8.6%.

Lockheed Martin Corp.’s (LMT - Free Report) first-quarter 2019 earnings came in at $5.99 per share, which outpaced the Zacks Consensus Estimate of $4.29 by 39.6%.

Hexcel Corporation (HXL - Free Report) reported first-quarter 2019 earnings of 84 cents per share, which exceeded the Zacks Consensus Estimate of 79 cents by 6.3%.

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