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Defense Stock Roundup: LHX, SPR, HII Beat on Q2 Earnings, LDOS Misses

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In the past five trading sessions, some encouraging earnings news surfaced from the defense space that must have had a favorable impact on the share performance of the defense stocks.

Consequently, major indices of the defense space ended in the green in the trailing five trading sessions. Evidently, the S&P 500 Aerospace & Defense (Industry) index and the Dow Jones U.S. Aerospace & Defense index rose 1.6% and 1.3%, respectively in the trailing five trading sessions.

In the past week, L3Harris Technologies (LHX - Free Report) , Leidos Holdings (LDOS - Free Report) , Spirit AeroSystems (SPR - Free Report) , Huntington Ingalls (HII - Free Report) and Curtiss-Wright (CW - Free Report) released their Q2 numbers.

Recap of Past Week’s Important Stories

1.    L3Harris’ second-quarter 2021 adjusted earnings came in at $3.26 per share, which surpassed the Zacks Consensus Estimate by 2.8% and also increased 15% year over year. Its revenues came in at $4,668 million, exceeding the Zacks Consensus Estimate by 0.5% and improved 5% on a year-over-year basis.

As of Jul 2, 2021, L3Harris had $2,029 million in cash and cash equivalents compared with $1,276 million as of Jan 1, 2021.

The company’s 2021 earnings are now projected to be in the range of $12.80-$13.00 per share, compared with the previous guidance of $12.70-$13.00 (read more: L3Harris Technologies Q2 Earnings Top, Revenues Rise Y/Y).

2.    Leidos’ second-quarter 2021 adjusted earnings of $1.52 per share missed the Zacks Consensus Estimate by 3.2% and declined 1.9% year over year.  It generated revenues of $3,448 million, which exceeded the Zacks Consensus Estimate by 3.3% and also improved 18.3% year over year.

At the end of the reported quarter, the company’s total backlog was $33.5 billion, up 9% year over year.

Net cash provided by operating activities in the first half of 2021 was $256 million compared with $794 million a year ago (read more: Leidos Holdings Q2 Earnings Miss, Revenues Rise Y/Y).

3.    Spirit AeroSystems’ second-quarter 2021 adjusted loss of 31 cents per share came in narrower than the Zacks Consensus Estimate’s loss and also improved on a year-over- year basis. Its revenues of $1,002 million exceeded the Zacks Consensus Estimate by 4.4% and improved 55% year over year.

The company incurred an operating loss of $97.7 million in the second quarter of 2021 compared with an operating loss of $367 million in the prior-year quarter.

Cash outflow from operating activities was $197.7 million at the end of second-quarter 2021 compared with the cash outflow of $559.7 million at the end of second-quarter 2020 (read more: Spirit AeroSystems Q2 Earnings Beat, Revenues Rise Y/Y).

4.    Huntington Ingalls Industries’ second-quarter 2021 adjusted earnings of $3.20 per share surpassed the Zacks Consensus Estimate by 28.5% and also improved 146.2% year over year. Its revenues came in at $2,231 million, surpassing the Zacks Consensus Estimate by 5.4% and also increased 10.1% from the year-ago quarter.

Huntington Ingalls received orders worth $1.2 billion during the second quarter.

Cash from operating activities at the end of first-half 2021 grossed $139 million, down from $269 million at the end of first-half 2020 (read more: Huntington Ingalls Q2 Earnings & Sales Beat Estimates).

5.    Curtiss-Wright’s second-quarter 2021 adjusted earnings of $1.56 per share surpassed the Zacks Consensus Estimate by 2% and grew 22% on a year-over-year basis. Its total sales of $621 million increased 13% year over year and also exceeded the Zacks Consensus Estimate by 5.4%.

New orders of $679 million increased 11% from the prior-year period.

The company currently expects to generate sales in the range of $2,465-$2,515 million in 2021, compared with the earlier guided range of $2,450-$2,500 million (read more: Curtiss-Wright Q2 Earnings Top Estimates, EPS View Raised)

Performance

Over the past five trading sessions, the defense biggies put up a solid show, except Northrop Grumman (NOC - Free Report) . Textron (TXT - Free Report) gained the most, with its shares up 5.2% followed by L3Harris.

In the last six months, the industry participants’ performance was impressive. This time also Textron gained the most, with its shares having surged 46% followed once again by L3Harris.

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
LMT0.09%7.17%
BA1.40%9.14%
GD1.56%24.71%
RTX0.72%20.82%
NOC-0.25%20.65%
TXT5.22%45.98%
LHX2.01%25.65%