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Defense Stock Roundup: HII, TGI, ERJ Miss on Earnings, FLIR, TDG Beat

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A handful of defense majors released their Q2 numbers this past week. Following their mixed performances, the major indices of the Aerospace-Defense space ended in the green over the trailing five trading sessions. Evidently, the S&P 500 Aerospace & Defense (Industry) index rose 3.9%, while the Dow Jones U.S. Aerospace & Defense index rose 4.1% in the aforementioned time period.

In the past week, quarterly results from a number of Aerospace-Defense majors namely, Huntington Ingalls Industries (HII - Free Report) , FLIR Systems (FLIR - Free Report) , Triumph Group (TGI - Free Report) , Embraer (ERJ - Free Report) , TransDigm Group (TDG - Free Report) and Spirit AeroSystems (SPR - Free Report) drew investors’ attention.

Recap of Past Week’s Important Stories

1.    Huntington Ingalls’ second-quarter 2020 earnings of $1.30 per share missed the Zacks Consensus Estimate by 69% and declined 57.8% from the prior-year quarter.

The company’s total revenues of $2.03 billion also missed the Zacks Consensus Estimate by 5.3% and declined 7.4% from the year-ago quarter. It received orders worth $2.9 billion during the second quarter.

Cash from operating activities, at the end of second-quarter 2020, grossed $269 million against cash used worth $33 million at the end of second-quarter 2019 (read more: Huntington Ingalls Q2 Earnings Miss, Revenues Drop Y/Y).

2.    FLIR Systems’ second-quarter 2020 adjusted earnings of 64 cents per share surpassed the Zacks Consensus Estimate by 28% and increased 23.1% year over year.

Its revenues of $482 million in the second quarter came almost in line with the prior-year quarter’s reported figure and the Zacks Consensus Estimate.

As of Jun 30, 2020, the company’s cash and cash equivalents were $333 million compared with $284.6 million as of Dec 31, 2019 (read more: FLIR Systems Q2 Earnings Top Estimates, Revenues Match).

3.    Triumph Group’s first-quarter fiscal 2021 (ended Jun 30, 2020) adjusted loss of 19 cents per share was wider than the Zacks Consensus Estimate and the prior-year quarter figure.

Its net sales of $495.1 million beat the Zacks Consensus Estimate by 7%. However, the top line slumped 32.2% on a year-over-year basis.

As of Jun 30, 2020, Triumph Group’s cash and cash equivalents totaled $30.9 million compared with $53.6 millionas of Dec 31, 2019 (read more: Triumph Group Q1 Earnings Lag Estimates, Sales Fall Y/Y).

4.    Embraer incurred second-quarter 2020 adjusted loss of $1.08 per American Depository Share (ADS), wider than the Zacks Consensus Estimate and the year-ago quarter’s loss.

Its second-quarter revenues came in at $537.2 million, plunging 61% year over year.Embraer delivered a total of 17 jets in the reported quarter, down 66.7% year over year.

As of Jun 30, 2020, the company’s cash and cash equivalents amounted to $1,872.8 million compared with $2,307.7 million as of Dec 31, 2019 (read more: Embraer Q2 Earnings Miss Estimates, Revenues Fall Y/Y).

5.    TransDigm Group’s third-quarter fiscal 2020 adjusted earnings of $1.54 per share surpassed the Zacks Consensus Estimate by 55.6% but decreased 66.9% year over year.

Its net sales of $1,022 million declined 32.8% from the prior-year quarter. The reported figure however outpaced the Zacks Consensus Estimate by 1.5%.

TransDigm ended the third quarter of fiscal 2020 with cash and cash equivalents of $4,549 million, up from $1,467 million as of Sep 30, 2019 (read more: TransDigm Q3 Earnings Beat Estimates, Sales Fall Y/Y).

6.    Spirit AeroSystems’ second-quarter 2020 adjusted loss of $2.28 per share was wider than the Zacks Consensus Estimate and also marked a deterioration from the year-ago quarter.

Total revenues of $644.6 million missed the Zacks Consensus Estimate by 20% and also plunged a massive 68% year over year.

As of Jul 2, 2020, Spirit AeroSystems had $1,947.1 million in cash and cash equivalents compared with $2,350.5 million as of Dec 31, 2019 (read more: Spirit AeroSystems Q2 Earnings Miss, Revenues Down Y/Y).

Performance

Over the past five trading sessions, the defense biggies put up a solid show. General Dynamics (GD - Free Report) gained the most, with its share price rising 9.3%,followed by L3Harris.

Over the last six months, the industry's performance was disappointing. Boeing lost the most with 47.9% slump in share price, followed by TransDigm Group.

The following table shows the price movement of the major defense players over the past five trading days and during the last six months.

CompanyPast WeekLast 6 Months
LMT2.23%-10.39%
BA9.12%-47.91%
GD7.89%-15.03%
RTX9.25%-25.76%
NOC5.18%-7.12%
TXT7.71%-21.49%
LHX7.98%-20.77%

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