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What's in the Cards for Maxar (MAXR) This Earnings Season?

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Maxar Technologies Inc. (MAXR - Free Report) is scheduled to report third-quarter 2020 results on Nov 5, after the closing bell. In the June quarter, adjusted earnings surpassed the Zacks Consensus Estimate by 21 cents.

The Westminster, CO-based space technology company is expected to have recorded lower consolidated revenues on a year-over-year basis due to uncertainties stemming from the COVID-19 pandemic. This takes into account reduced volumes of commercial programs at Maxar’s Space Infrastructure segment and supplier delays, along with increase in estimated program costs.

Factors at Play

During the quarter under review, Maxar renewed four multi-year agreements and extended a one-year contract to enable customers to gain a first-hand access to its state-of-the-art satellite constellation. These contracts, which were valued at more than $120 million, is expected to have reinforced Maxar’s capabilities in Earth Intelligence and Space Infrastructure while benefiting intelligence and defense customers with avant-garde mission-critical solutions across global markets. This is likely to be positively reflected in the upcoming results.

However, persistent logistics and supply chain disruptions coupled with evolving market conditions post the deadly virus outbreak are likely to have had an adverse impact on Maxar’s third-quarter revenues.

For the September quarter, the Zacks Consensus Estimate for total revenues is pegged at $470 million, indicating a 1.9% decline from the year-ago quarter’s reported figure. However, adjusted loss per share stands at 4 cents, which implies significant improvement from a loss of 44 cents recorded in the prior-year quarter.

Key Developments in Q3

The company also clinched a contract to build the Galaxy 37 geostationary communications satellite for a leading terrestrial and satellite network services provider — Intelsat. The Galaxy 37, based on Maxar’s 1300-class spacecraft platform, will aid Intelsat to revamp its existing media distribution and contribution services, thereby freeing up spectrum for 5G terrestrial wireless services.

Maxar appointed space industry expert, Jim McClelland, to lead its newly formed Mission Architecture business. This strategic initiative is likely to boost Maxar’s Space Infrastructure segment while tapping lucrative opportunities in the civil and national security markets based in the United States. Further, it secured an eight-year indefinite-delivery, indefinite-quantity contract valued at up to $49 million by the U.S. Army Geospatial Center for the supply of high-grade tactical ground systems. These portable defense systems will provide crucial geospatial intelligence to address national security challenges with unrivalled speed and cost effectiveness.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Maxar this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Earnings ESP: Maxar’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -242.86% as the former is pegged at a loss of 12 cents and the latter at a loss of 4 cents.

Maxar Technologies Ltd. Price and EPS Surprise

Zacks Rank: Maxar currently carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

Chuy's Holdings, Inc. (CHUY - Free Report) is slated to release third-quarter 2020 results on Nov 5. It has an Earnings ESP of +2.94% and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Endo International plc (ENDP - Free Report) is scheduled to release third-quarter 2020 results on Nov 5. The company has an Earnings ESP of +33.34% and carries a Zacks Rank #2, at present.

Redfin Corporation (RDFN - Free Report) has an Earnings ESP of +21.94% and a Zacks Rank of 2. The company is set to report third-quarter 2020 results on Nov 5.

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