Last week, we saw sector behemoth Lockheed Martin Corp. (LMT - Free Report) reporting quarterly numbers, kick-starting the second-quarter earnings cycle at the defense sector. Following its suit, a few other companies like Textron Inc. (TXT - Free Report) and Rockwell Collins Inc. also came up with second-quarter results.
As of Jul 22, 32.7% of the market cap of the S&P 500 index had released earnings. Reported results reveal a 1.1% decline in earnings in spite of 2.6% higher revenues. Overall earnings are anticipated to record a 3.4% decline on 0.5% lower revenues, with 9 of the 16 Zacks sectors hovering in the negative territory. The picture should become clearer by the end of this week, as nearly 189 of the index members have their earnings releases lined up.
The aerospace and defense sector, however, appears to be looking up, which is much better than the overall Q2 forecast. Sector earnings are likely to improve 9.4% on a 1.5% increase in revenues. For more details on quarterly releases, you can go through our Earnings Trends report.
By last Friday, 26% of the total market cap of the defense sector had come up with quarterly performances. For these companies, overall earnings witnessed a 9.2% rise on 10.3% higher revenues.
Let’s take a look at four defense companies – Raytheon Company , L-3 Communications Holdings Inc. , Triumph Group, Inc. (TGI - Free Report) and Leidos Holdings, Inc. (LDOS - Free Report) – that are all scheduled to release quarterly results before the opening bell on Jul 28.
Missile manufacturer Raytheon has an Earnings ESP of +8.82% and a Zacks Rank #3 (Hold).
The company expects to start witnessing an improvement in its missile business from the second quarter, which will continue through the rest of the year. Management stated that the Integrated Defense Systems (“IDS”) division, which includes Patriot, will likely post impressive margins in the to-be-reported quarter as international Patriot programs continue to ramp up. On its first-quarter earnings call, Raytheon raised its adjusted earnings forecast for 2016 by 13 cents per share, accounting for a tax benefit from a new accounting standard for stock compensation. This is expected to reduce its effective tax rate for the whole year. (Read more: Can Raytheon Keep the Earnings Streak Alive in Q2?)
During the first-quarter earnings call, L-3 Communications’ management stated that quarterly earnings were driven extensively by market share gains in core areas, which will continue to do so throughout 2016. Keeping with this, management raised its adjusted earnings per share guidance to the range of $7.55 to $7.75 from the prior projection of $7.40–$7.60.
However, the company believes that the final sales surplus from the troop drawdown from Afghanistan would dent revenues by about $135 million in 2016, excluding which, sales to the U.S. government and DoD markets would have been more or less flat. (Read more: L-3 Communications Q2 Earnings: What's in Store?)
The company has an Earnings ESP of -1.19% and a Zacks Rank #3.
Triumph Group is scheduled to report first-quarter fiscal 2017 results.
On its fiscal fourth-quarter 2016 earnings call, the company had announced its plan to streamline its business units from six to four to reduce costs and better support the “go-to-market strategies.” This restructuring initiative will be effective from the first quarter of 2017, and its effects and costs will be recorded in the to-be reported quarter. The company said that it expects the first half of the year to be considerably weak due to transformation efforts and cost reduction initiatives.
Triumph Group has an Earnings ESP of -6.25% and a Zacks Rank #4 (Sell), which does not conclusively point toward a likely earnings beat this quarter.
Leidos’ consistent investments in internal research and development allow it to stay at the forefront of technological innovation in its key addressable markets. The company also enjoys a continuous flow of contracts from the U.S. DoD. During the second quarter, it has bagged a number of contracts, which should propel its top line.
The company has an Earnings ESP of +0.00% and a Zacks Rank #4 (Sell), which does not conclusively indicate that the company will be able to beat earnings in the to-be-reported quarter.
Stay tuned! Check later for our full write-up on earnings releases of these stocks.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Last week, we saw sector behemoth Lockheed Martin Corp. (LMT - Free Report) reporting quarterly numbers, kick-starting the second-quarter earnings cycle at the defense sector. Following its suit, a few other companies like Textron Inc. (TXT - Free Report) and Rockwell Collins Inc. also came up with second-quarter results.
As of Jul 22, 32.7% of the market cap of the S&P 500 index had released earnings. Reported results reveal a 1.1% decline in earnings in spite of 2.6% higher revenues. Overall earnings are anticipated to record a 3.4% decline on 0.5% lower revenues, with 9 of the 16 Zacks sectors hovering in the negative territory. The picture should become clearer by the end of this week, as nearly 189 of the index members have their earnings releases lined up.
The aerospace and defense sector, however, appears to be looking up, which is much better than the overall Q2 forecast. Sector earnings are likely to improve 9.4% on a 1.5% increase in revenues. For more details on quarterly releases, you can go through our Earnings Trends report.
By last Friday, 26% of the total market cap of the defense sector had come up with quarterly performances. For these companies, overall earnings witnessed a 9.2% rise on 10.3% higher revenues.
Let’s take a look at four defense companies – Raytheon Company , L-3 Communications Holdings Inc. , Triumph Group, Inc. (TGI - Free Report) and Leidos Holdings, Inc. (LDOS - Free Report) – that are all scheduled to release quarterly results before the opening bell on Jul 28.
Missile manufacturer Raytheon has an Earnings ESP of +8.82% and a Zacks Rank #3 (Hold).
The company expects to start witnessing an improvement in its missile business from the second quarter, which will continue through the rest of the year. Management stated that the Integrated Defense Systems (“IDS”) division, which includes Patriot, will likely post impressive margins in the to-be-reported quarter as international Patriot programs continue to ramp up. On its first-quarter earnings call, Raytheon raised its adjusted earnings forecast for 2016 by 13 cents per share, accounting for a tax benefit from a new accounting standard for stock compensation. This is expected to reduce its effective tax rate for the whole year. (Read more: Can Raytheon Keep the Earnings Streak Alive in Q2?)
During the first-quarter earnings call, L-3 Communications’ management stated that quarterly earnings were driven extensively by market share gains in core areas, which will continue to do so throughout 2016. Keeping with this, management raised its adjusted earnings per share guidance to the range of $7.55 to $7.75 from the prior projection of $7.40–$7.60.
However, the company believes that the final sales surplus from the troop drawdown from Afghanistan would dent revenues by about $135 million in 2016, excluding which, sales to the U.S. government and DoD markets would have been more or less flat. (Read more: L-3 Communications Q2 Earnings: What's in Store?)
The company has an Earnings ESP of -1.19% and a Zacks Rank #3.
Triumph Group is scheduled to report first-quarter fiscal 2017 results.
On its fiscal fourth-quarter 2016 earnings call, the company had announced its plan to streamline its business units from six to four to reduce costs and better support the “go-to-market strategies.” This restructuring initiative will be effective from the first quarter of 2017, and its effects and costs will be recorded in the to-be reported quarter. The company said that it expects the first half of the year to be considerably weak due to transformation efforts and cost reduction initiatives.
Triumph Group has an Earnings ESP of -6.25% and a Zacks Rank #4 (Sell), which does not conclusively point toward a likely earnings beat this quarter.
Leidos’ consistent investments in internal research and development allow it to stay at the forefront of technological innovation in its key addressable markets. The company also enjoys a continuous flow of contracts from the U.S. DoD. During the second quarter, it has bagged a number of contracts, which should propel its top line.
The company has an Earnings ESP of +0.00% and a Zacks Rank #4 (Sell), which does not conclusively indicate that the company will be able to beat earnings in the to-be-reported quarter.
Stay tuned! Check later for our full write-up on earnings releases of these stocks.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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