Back to top

Image: Bigstock

Aerospace & Defense Q1 Earnings Due on Apr 27: BA, GD & TDY

Read MoreHide Full Article

The Q1 earnings season for aerospace and defense stocks kickstarted on a solid note, with Lockheed Martin surpassing earnings estimates. Some major industry players like Boeing (BA - Free Report) , General Dynamics (GD - Free Report) and Teledyne Technologies (TDY - Free Report) are set to reveal their Q1 numbers this week.  

Factors that Influenced Aerospace & Defense Stocks

A steady recovery witnessed in global air travel, both domestic and international, is expected to have boosted the quarterly results of the aerospace and defense stocks, particularly those engaged in commercial aviation, in the first quarter. Boeing witnessed a solid year-over-year surge of 23.4% in its commercial shipment during the first quarter. With Boeing being the largest jet maker in the nation, we expect the Q1 results of the remaining aerospace majors to reflect a similar improvement in delivery trends. Such solid deliveries must have boosted the overall top-line growth of the Aerospace sector, which houses all aerospace and defense stocks.

On the other hand, stocks that are more focused on combat must have also gained as a result of steady government support. Moreover, a steady order flow observed in the past couple of quarters, along with improved deliveries in recent times, buoyed by recovering economic trends are projected to have bolstered Q1 revenues of aerospace and defense stocks.

However, persistent headwinds like supply chain disruption along with the slow pace of cash inflow within the industry might have had an adverse impact on the overall Q1 results of some of the industry majors.

Q1 Projections

Aerospace sector Q1 earnings are expected to improve 10.8% from the prior-year quarter’s reported figure, while revenues are projected to slip by 0.4%.  

For more details on quarterly releases, you can go through the latest Earnings Preview.

Aerospace & Defense Stocks to Watch

Let's take a look at three defense companies that are scheduled to report first-quarter 2022 earnings on Apr 27 and find out how things have shaped up prior to the announcements.

Boeing’s first-quarter deliveries reflected a solid 23.4% surge in commercial shipments from the year-ago reported figure. Such solid delivery numbers from manufacturing companies like Boeing are likely to have contributed favorably to the jet maker’s overall first-quarter results.

Improving aftermarket commercial jet services are expected to have bolstered the top-line performance of the company’s global services unit. However, the abnormal costs in relation to the 787 program might have had some adverse impact on the company’s bottom line.

According to the Zacks model, 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. You can see the complete list of today’s Zacks #1 Rank stocks here.

Boeing currently has an Earnings ESP of +1.72% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Boeing Company Price and EPS Surprise

The Boeing Company Price and EPS Surprise

The Boeing Company price-eps-surprise | The Boeing Company Quote

General Dynamics’ Q1 results are expected to reflect poor segmental performance from most of its segments. While lower delivery rates are projected to have hurt its Aerospace unit’s performance, the shortage of chips might have hampered the Technologies unit’s growth. On the other hand, the lower demand is anticipated to have hurt Combat Systems, although increased demand for shipbuilding from the U.S. Navy is expected to have benefited the Marine Systems segment.

This along with increased research and development expenses related to the ongoing product development efforts, including flight test activities for the G700, are likely to have an adverse impact on GD’s soon-to-be-reported quarterly earnings.

General Dynamics has an Earnings ESP of 0.00% and a Zacks Rank #3 (read more: Will Segment Sales Hurt General Dynamics' Q1 Earnings? ).

Teledyne’s Q1 results are likely to reflect solid segmental performance from the majority of its business units. While higher sales of electronic tests and measurement instrumentation, marine are projected to have boosted the top line of the Instrumentation segment, the FLIR acquisition must have bolstered the Digital Imaging unit’s revenues. However, lower sales of engineered products and the turbine engine business might have hurt Engineered Systems’ performance.

Also, the impact of inflation and supply-chain constraints are likely to have had an adverse impact on TDY’s soon-to-be-reported quarterly results.

Teledyne currently has an Earnings ESP of -1.71% and a Zacks Rank #3 (read more: Will Strong Sales Momentum Boost Teledyne's Q1 Earnings?).

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

The Boeing Company (BA) - free report >>

General Dynamics Corporation (GD) - free report >>

Teledyne Technologies Incorporated (TDY) - free report >>