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Will Lower Defense Deliveries Hit Boeing (BA) in Q2 Earnings?
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The Boeing Company’s (BA - Free Report) Defense, Space & Security (BDS) segment is likely to have recorded unimpressive second-quarter 2023 revenues, owing to lower deliveries of its defense products. On the other hand, supply-chain constraints might have impacted the unit’s quarterly bottom-line performance.
Boeing’s second-quarter results are scheduled to be released on Jul 26.
Click here to know how the company’s overall performance might have been in the soon-to-be-reported quarter.
Steady Order Flow to Aid Backlog
With the U.S. administration spending significantly on the nation’s defense capabilities for the past couple of years, Boeing’s defense and space unit has been witnessing solid order flow from the Pentagon, NASA and Congress for its varied products. This, in turn, has been consistently boosting the BDS segment’s backlog.
The defense market has been relatively stable amid the uncertainties caused by the COVID-19 pandemic. Boeing has been witnessing solid global demand for its major combat programs, which translated into an overall order value of $10 billion for the BDS unit in the first quarter. We expect the upcoming results to reflect a similar order count for the unit, thereby bolstering its backlog figure.
Dismal Deliveries to Hurt Q2 Performance
Boeing’s second-quarter defense delivery figures indicate a decline of 5% from the year-ago period’s level.
Its defense deliveries totaled 38 in the quarter, down from 40 in the prior-year quarter. Such declining delivery figures are expected to have hurt the defense segment’s revenues in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for the company’s defense unit revenues is pegged at $6,022 million, indicating a deterioration of 2.7% year over year.
Earnings Prospect
Lower delivery volumes for its defense products are likely to have had an adverse impact on the BDS segment’s bottom line.
Moreover, the impact of supply-chain constraints might have hurt its second-quarter earnings. Nevertheless, strong order activities in the previous quarters are expected to have favorably contributed to BDS’ overall earnings performance, to some extent.
Notably, the earnings estimate for the company’s defense unit is pegged at $47.5 million, indicating a decline of 33.1% from the year-ago quarter’s number.
What the Zacks Model Unveils
According to the Zacks model, the combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) — increases the odds of an earnings beat. That is not the case here.
Boeing currently has an Earnings ESP of -2.87% and 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
Below are three defense stocks that have the right combination of elements to post an earnings beat this reporting cycle.
Huntington Ingalls delivered a four-quarter average earnings surprise of 8.09%. The consensus estimate for its second-quarter earnings is pegged at $3.14 per share, while that for sales is pinned at $2.73 billion.
L3Harris Technologies (LHX - Free Report) is scheduled to release second-quarter results on Jul 26. LHX has an Earnings ESP of +0.85% and a Zacks Rank #3 at present.
L3Harris delivered a four-quarter negative earnings surprise of 0.37%, on average. The Zacks Consensus Estimate for LHX’s earnings is pegged at $2.94 per share, while that for sales is pinned at $4.36 billion.
Embraer SA (ERJ - Free Report) is expected to report second-quarter results on Aug 14. ERJ has an Earnings ESP of +25% and a Zacks Rank #3 at present.
Embraer delivered a four-quarter average negative earnings surprise of 253.33%. The consensus mark for ERJ’s earnings is pegged at 12 cents per share, while that for sales is pinned at $1.16 billion.
Image: Bigstock
Will Lower Defense Deliveries Hit Boeing (BA) in Q2 Earnings?
The Boeing Company’s (BA - Free Report) Defense, Space & Security (BDS) segment is likely to have recorded unimpressive second-quarter 2023 revenues, owing to lower deliveries of its defense products. On the other hand, supply-chain constraints might have impacted the unit’s quarterly bottom-line performance.
Boeing’s second-quarter results are scheduled to be released on Jul 26.
Click here to know how the company’s overall performance might have been in the soon-to-be-reported quarter.
Steady Order Flow to Aid Backlog
With the U.S. administration spending significantly on the nation’s defense capabilities for the past couple of years, Boeing’s defense and space unit has been witnessing solid order flow from the Pentagon, NASA and Congress for its varied products. This, in turn, has been consistently boosting the BDS segment’s backlog.
The Boeing Company Price and EPS Surprise
The Boeing Company price-eps-surprise | The Boeing Company Quote
The defense market has been relatively stable amid the uncertainties caused by the COVID-19 pandemic. Boeing has been witnessing solid global demand for its major combat programs, which translated into an overall order value of $10 billion for the BDS unit in the first quarter. We expect the upcoming results to reflect a similar order count for the unit, thereby bolstering its backlog figure.
Dismal Deliveries to Hurt Q2 Performance
Boeing’s second-quarter defense delivery figures indicate a decline of 5% from the year-ago period’s level.
Its defense deliveries totaled 38 in the quarter, down from 40 in the prior-year quarter. Such declining delivery figures are expected to have hurt the defense segment’s revenues in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for the company’s defense unit revenues is pegged at $6,022 million, indicating a deterioration of 2.7% year over year.
Earnings Prospect
Lower delivery volumes for its defense products are likely to have had an adverse impact on the BDS segment’s bottom line.
Moreover, the impact of supply-chain constraints might have hurt its second-quarter earnings. Nevertheless, strong order activities in the previous quarters are expected to have favorably contributed to BDS’ overall earnings performance, to some extent.
Notably, the earnings estimate for the company’s defense unit is pegged at $47.5 million, indicating a decline of 33.1% from the year-ago quarter’s number.
What the Zacks Model Unveils
According to the Zacks model, the combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) — increases the odds of an earnings beat. That is not the case here.
Boeing currently has an Earnings ESP of -2.87% and 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
Below are three defense stocks that have the right combination of elements to post an earnings beat this reporting cycle.
Huntington Ingalls Industries (HII - Free Report) is expected to release second-quarter results on Aug 3. HII has an Earnings ESP of +0.48% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Huntington Ingalls delivered a four-quarter average earnings surprise of 8.09%. The consensus estimate for its second-quarter earnings is pegged at $3.14 per share, while that for sales is pinned at $2.73 billion.
L3Harris Technologies (LHX - Free Report) is scheduled to release second-quarter results on Jul 26. LHX has an Earnings ESP of +0.85% and a Zacks Rank #3 at present.
L3Harris delivered a four-quarter negative earnings surprise of 0.37%, on average. The Zacks Consensus Estimate for LHX’s earnings is pegged at $2.94 per share, while that for sales is pinned at $4.36 billion.
Embraer SA (ERJ - Free Report) is expected to report second-quarter results on Aug 14. ERJ has an Earnings ESP of +25% and a Zacks Rank #3 at present.
Embraer delivered a four-quarter average negative earnings surprise of 253.33%. The consensus mark for ERJ’s earnings is pegged at 12 cents per share, while that for sales is pinned at $1.16 billion.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.