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In the past five trading sessions, we witnessed results of some of the key defense players who delivered mixed operational performance. The U.S. stock market as a whole continued to reel under the record rise in COVID-19 cases and uncertainty revolving around the upcoming elections.
The S&P 500 Aerospace & Defense (Industry) index slipped 0.6%, while the Dow Jones U.S. Aerospace & Defense index dipped 1.7% in the trailing five trading sessions.
1. Boeing incurred adjusted loss of $1.39 per share for third-quarter 2020 narrower than the Zacks Consensus Estimate. However, the bottom line deteriorated from earnings reported in the year-ago quarter. Its revenues of $14.14 billion beat the Zacks Consensus Estimate by 2.4% but declined 29.2% from the year-ago quarter’s figure.
Backlog at the end of third-quarter 2020 dropped to $393.1 billion from $408.7 billion at the end of second-quarter 2020.
Boeing exited the third quarter with cash and cash equivalents of $10.56 billion and short-term and other investments of $16.55 billion. Its free cash outflow totaled $15.44 billion in third-quarter 2020 (read more: Boeing Q3 Earnings Beat Estimates, Revenues Decline Y/Y).
2. L3Harris’ third-quarter 2020 adjusted earnings came in at $2.84 per share, which surpassed the Zacks Consensus Estimate by 4.4% and increased 10% year over year. Its revenues came in at $4,463 million, lagging the Zacks Consensus Estimate by 0.8%. However, revenues inched up 0.7% on a year-over-year basis.
As of Oct 2, 2020, L3Harris had $1,341 million in cash and cash equivalents compared with $824 million as of Jan 3, 2020.
L3Harris made some changes to its 2020 guidance. The company currently expects to generate organic revenues of 4% on a pro-forma basis and revenues of $18.4 billion (read more: L3Harris Technologies Beats on Q3 Earnings, Tweaks View).
3. General Dynamics reported third-quarter 2020 earnings from continuing operations of $2.90 per share, which beat the Zacks Consensus Estimate by 1.8% but declined 7.6% from the prior-year quarter. Its revenues of $9,431 million missed the Zacks Consensus Estimate by 1.7% and also declined 3.4% year over year.
General Dynamics’ total backlog at the end of third-quarter 2020 was $81.5 billion, up 21% from the year-ago quarter.
Company-wide operating margin contracted 100 basis points (bps) to 11.5% from the year-ago quarter’s 12.5%. In the first nine months of 2020, the company’s cash provided by operating activities was $1,296 million, compared with $587 million in the year-ago period (read more: General Dynamics' Q3 Earnings Beat, Revenues Down Y/Y).
4. Textron’s third-quarter 2020 adjusted earnings of 53 cents per share exceeded the Zacks Consensus Estimate by 51.4%. Its revenues of $2,735 million missed the Zacks Consensus Estimate by 3.1% and also decreased 16.1% year over year.
As of Oct 3, 2020, cash and cash equivalents totaled $2,518 million compared with $1,181 million as of Jan 4, 2020.
Cash flow from operating activities amounted to $220 million at the end of the third quarter compared with $205 million at the end of the prior-year period (read more: Textron Q3 Earnings Beat Estimates, Revenues Fall Y/Y).
5. Raytheon Technologies’ third-quarter 2020 adjusted earnings per share (EPS) of 58 cents outpaced the Zacks Consensus Estimate by 20.8% but declined 54.3% from the year-ago quarter’s tally. The company’s GAAP sales came in at $14,747 million, which missed the Zacks Consensus Estimate by 2.5%.
Raytheon Technologies ended Sep 30, 2020 with cash and cash equivalents of $10,001 million, up from $4,937 million as of Dec 31, 2019.
6. FLIR Systems’ third-quarter 2020 adjusted earnings of 64 cents per share surpassed the Zacks Consensus Estimate by 14.3% and increased 10.3% from the prior-year quarter. Its revenues declined 1% year over year and also missed the Zacks Consensus Estimate by 1%.
Total backlog at the end of the third quarter increased 10.9% to $898.7 million on a year-over-year basis.
Cash flow from operating activities for the nine months ended Sep 30, 2020 amounted to $196.2 million compared with $276.8 million as of Sep 30, 2019. FLIR Systems updated its financial guidance for 2020 (read more: FLIR Systems Q3 Earnings Beat, Revenues Down Y/Y).
Performance
Over the past five trading sessions, the defense biggies put up a poor show. Boeing lost the most, with its share price declining 13.7%, followed by Raytheon Technologies.
In the last six months, the industry's performance was mixed. Textron gained the most this time, up 30%, while Raytheon lost 13.1%.
The following table shows the price movement of the major defense players over the past five trading days and during the last six months.
Company
Past Week
Last 6 Months
LMT
-2.21%
-8.69%
BA
-13.72%
11.19%
GD
-6.66%
2.75%
RTX
-13.19%
-13.04%
NOC
-6.03%
-11.66%
TXT
1.73%
29.94%
LHX
-6.22%
-14.96%
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Defense Stock Roundup: BA, LHX, GD, LHX, Beat on Q3 Earnings
In the past five trading sessions, we witnessed results of some of the key defense players who delivered mixed operational performance. The U.S. stock market as a whole continued to reel under the record rise in COVID-19 cases and uncertainty revolving around the upcoming elections.
The S&P 500 Aerospace & Defense (Industry) index slipped 0.6%, while the Dow Jones U.S. Aerospace & Defense index dipped 1.7% in the trailing five trading sessions.
In the past week, The Boeing Company (BA - Free Report) , L3Harris Technologies (LHX - Free Report) , General Dynamics (GD - Free Report) , Textron (TXT - Free Report) , Raytheon Technologies (RTX - Free Report) and FLIR Systems reported their Q3 results.
Recap of Past Week’s Important Stories
1. Boeing incurred adjusted loss of $1.39 per share for third-quarter 2020 narrower than the Zacks Consensus Estimate. However, the bottom line deteriorated from earnings reported in the year-ago quarter. Its revenues of $14.14 billion beat the Zacks Consensus Estimate by 2.4% but declined 29.2% from the year-ago quarter’s figure.
Backlog at the end of third-quarter 2020 dropped to $393.1 billion from $408.7 billion at the end of second-quarter 2020.
Boeing exited the third quarter with cash and cash equivalents of $10.56 billion and short-term and other investments of $16.55 billion. Its free cash outflow totaled $15.44 billion in third-quarter 2020 (read more: Boeing Q3 Earnings Beat Estimates, Revenues Decline Y/Y).
2. L3Harris’ third-quarter 2020 adjusted earnings came in at $2.84 per share, which surpassed the Zacks Consensus Estimate by 4.4% and increased 10% year over year. Its revenues came in at $4,463 million, lagging the Zacks Consensus Estimate by 0.8%. However, revenues inched up 0.7% on a year-over-year basis.
As of Oct 2, 2020, L3Harris had $1,341 million in cash and cash equivalents compared with $824 million as of Jan 3, 2020.
L3Harris made some changes to its 2020 guidance. The company currently expects to generate organic revenues of 4% on a pro-forma basis and revenues of $18.4 billion (read more: L3Harris Technologies Beats on Q3 Earnings, Tweaks View).
3. General Dynamics reported third-quarter 2020 earnings from continuing operations of $2.90 per share, which beat the Zacks Consensus Estimate by 1.8% but declined 7.6% from the prior-year quarter. Its revenues of $9,431 million missed the Zacks Consensus Estimate by 1.7% and also declined 3.4% year over year.
General Dynamics’ total backlog at the end of third-quarter 2020 was $81.5 billion, up 21% from the year-ago quarter.
Company-wide operating margin contracted 100 basis points (bps) to 11.5% from the year-ago quarter’s 12.5%. In the first nine months of 2020, the company’s cash provided by operating activities was $1,296 million, compared with $587 million in the year-ago period (read more: General Dynamics' Q3 Earnings Beat, Revenues Down Y/Y).
4. Textron’s third-quarter 2020 adjusted earnings of 53 cents per share exceeded the Zacks Consensus Estimate by 51.4%. Its revenues of $2,735 million missed the Zacks Consensus Estimate by 3.1% and also decreased 16.1% year over year.
As of Oct 3, 2020, cash and cash equivalents totaled $2,518 million compared with $1,181 million as of Jan 4, 2020.
Cash flow from operating activities amounted to $220 million at the end of the third quarter compared with $205 million at the end of the prior-year period (read more: Textron Q3 Earnings Beat Estimates, Revenues Fall Y/Y).
5. Raytheon Technologies’ third-quarter 2020 adjusted earnings per share (EPS) of 58 cents outpaced the Zacks Consensus Estimate by 20.8% but declined 54.3% from the year-ago quarter’s tally. The company’s GAAP sales came in at $14,747 million, which missed the Zacks Consensus Estimate by 2.5%.
Raytheon Technologies ended Sep 30, 2020 with cash and cash equivalents of $10,001 million, up from $4,937 million as of Dec 31, 2019.
Its free cash flow was $1,792 million compared with $3,374 million at the end of third-quarter 2019 (read more: Raytheon Technologies Q3 Earnings Beat, Sales Miss).
6. FLIR Systems’ third-quarter 2020 adjusted earnings of 64 cents per share surpassed the Zacks Consensus Estimate by 14.3% and increased 10.3% from the prior-year quarter. Its revenues declined 1% year over year and also missed the Zacks Consensus Estimate by 1%.
Total backlog at the end of the third quarter increased 10.9% to $898.7 million on a year-over-year basis.
Cash flow from operating activities for the nine months ended Sep 30, 2020 amounted to $196.2 million compared with $276.8 million as of Sep 30, 2019. FLIR Systems updated its financial guidance for 2020 (read more: FLIR Systems Q3 Earnings Beat, Revenues Down Y/Y).
Performance
Over the past five trading sessions, the defense biggies put up a poor show. Boeing lost the most, with its share price declining 13.7%, followed by Raytheon Technologies.
In the last six months, the industry's performance was mixed. Textron gained the most this time, up 30%, while Raytheon lost 13.1%.
The following table shows the price movement of the major defense players over the past five trading days and during the last six months.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>