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Aerospace & Defense ETFs Under Spotlight Amid Upbeat Q2 Results
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The rebound in demand for air travel even amid high prices, is a positive for the sector. The S&P Aerospace & Defense Select Industry Index has added 14.76%, outperforming the broader S&P 500 Index, which gave returns of 11.11% over the past year (as of Jul 31).
The sector has reported upbeat second-quarter 2023 results, with 13 companies in the Zacks Aerospace sector reporting their earnings till now and 85% among them surpassing the Zacks Consensus Estimate. The Zacks Aerospace sector lies in the top 25% of the Zacks Industry Rank (See: Overview of the Zacks Aerospace Sector).
Below, we highlight Q2 earnings results of a few renowned U.S. Aerospace – Defense Industry players.
Earnings in Focus
Northrop Grumman
On Jul 27, Northrop Grumman (NOC - Free Report) reported second-quarter 2023 earnings of $5.34 per share, beating the Zacks Consensus Estimate of $5.31 by 0.6%. The results were fueled by strong demand along with improving labor availability and supplier deliveries. The company has a Zacks Rank #2 (Buy) and a Value Score of B (as of Jul 31).
The bottom line decreased 12% from $6.06 per share recorded in the year-ago quarter. Reporting total sales of $9.58 billion, NOC beat the Zacks Consensus Estimate of $9.32 billion by 2.7%. Additionally, the top line increased 9% from $8.80 billion in the year-ago quarter.
Northrop Grumman raised some of its financial guidance for 2023, currently expecting revenues in the range of $38.40-$38.80 billion compared with its earlier guidance of $38.00-$38.40 billion.
RTX CORP
On Jul 25, RTX CORP (RTX - Free Report) reported second-quarter 2023 earnings of $1.29, beating the Zacks Consensus Estimate of $1.17 by 10.3%. The company currently has a Zacks Rank #3 (Hold), along with a VGM Score of B (as of Jul 31).
The bottom line also improved 11% from the year-ago quarter’s level of $1.16. RTX reported second-quarter sales of $18,315 million which surpassed the Zacks Consensus Estimate of $17,543 million by 4.4%. The figure also rose 12.3% from $16,314 million recorded in the year-ago period.
Raytheon Technologies has updated its financial guidance for 2023. The company projected adjusted EPS in the band of $4.95-$5.05 comapred with the earlier projected range of $4.90-$5.05.
General Dynamics
On Jul 26, General Dynamics (GD - Free Report) reported second-quarter 2023 earnings of $2.70, which beat the Zacks Consensus Estimate of $2.59 by 4.2%. However, the figure decreased 1.8% from $2.75 per share recorded in the year-ago quarter. Amid the ongoing resilience in demand for business jets and military equipment, the company posted upbeat results. The company has a Zacks Rank #3 (Hold), along with a Value Score of B (as of Jul 31).
General Dynamic’s revenues of $10,152 million beat the Zacks Consensus Estimate of $9,413.3 million by 7.8%. The top line also improved 10.5% from that reported in the prior-year period.
Boeing
On Jul 26, Boeing (BA - Free Report) reported second-quarter 2023. The company posted mixed results, where the year-over-year downside in the bottom line can be attributed to lower defense margins. BA has a Zacks Rank #3 (Hold) with a Growth Score of B.
Boeing incurred an adjusted loss of 82 cents per share in second-quarter 2023, narrower than the Zacks Consensus Estimate of a loss of 99 cents. The bottom line deteriorated from the year-ago quarter’s reported loss of 37 cents per share.
However, BA’s revenues amounted to $19.75 billion, which beat the Zacks Consensus Estimate of $18.46 billion by 7%. The top line also improved 18% from the year-ago quarter’s reported figure of $16.68 billion. This improvement was driven by higher year-over-year revenues registered by the company’s Commercial Airplanes and Global Services business units.
ETFs in Focus
The afore-mentioned stocks have considerable exposure toAerospace – Defense ETFs. For investors looking to take a bet on upbeat Q2 results as well as a continued surge in demand for air travel, the following ETFs provide a great opportunity.
iShares U.S. Aerospace & Defense ETF (ITA - Free Report) – Up about 2.75% in the past one week (as of Jul 31)
Invesco Aerospace & Defense ETF (PPA - Free Report) – Up about 0.79% in the past one week (as of Jul 31)
SPDR S&P Aerospace & Defense ETF (XAR - Free Report) – Up about 2.47% in the past one week (as of Jul 31)
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Aerospace & Defense ETFs Under Spotlight Amid Upbeat Q2 Results
The rebound in demand for air travel even amid high prices, is a positive for the sector. The S&P Aerospace & Defense Select Industry Index has added 14.76%, outperforming the broader S&P 500 Index, which gave returns of 11.11% over the past year (as of Jul 31).
The sector has reported upbeat second-quarter 2023 results, with 13 companies in the Zacks Aerospace sector reporting their earnings till now and 85% among them surpassing the Zacks Consensus Estimate. The Zacks Aerospace sector lies in the top 25% of the Zacks Industry Rank (See: Overview of the Zacks Aerospace Sector).
Below, we highlight Q2 earnings results of a few renowned U.S. Aerospace – Defense Industry players.
Earnings in Focus
Northrop Grumman
On Jul 27, Northrop Grumman (NOC - Free Report) reported second-quarter 2023 earnings of $5.34 per share, beating the Zacks Consensus Estimate of $5.31 by 0.6%. The results were fueled by strong demand along with improving labor availability and supplier deliveries. The company has a Zacks Rank #2 (Buy) and a Value Score of B (as of Jul 31).
The bottom line decreased 12% from $6.06 per share recorded in the year-ago quarter. Reporting total sales of $9.58 billion, NOC beat the Zacks Consensus Estimate of $9.32 billion by 2.7%. Additionally, the top line increased 9% from $8.80 billion in the year-ago quarter.
Northrop Grumman raised some of its financial guidance for 2023, currently expecting revenues in the range of $38.40-$38.80 billion compared with its earlier guidance of $38.00-$38.40 billion.
RTX CORP
On Jul 25, RTX CORP (RTX - Free Report) reported second-quarter 2023 earnings of $1.29, beating the Zacks Consensus Estimate of $1.17 by 10.3%. The company currently has a Zacks Rank #3 (Hold), along with a VGM Score of B (as of Jul 31).
The bottom line also improved 11% from the year-ago quarter’s level of $1.16. RTX reported second-quarter sales of $18,315 million which surpassed the Zacks Consensus Estimate of $17,543 million by 4.4%. The figure also rose 12.3% from $16,314 million recorded in the year-ago period.
Raytheon Technologies has updated its financial guidance for 2023. The company projected adjusted EPS in the band of $4.95-$5.05 comapred with the earlier projected range of $4.90-$5.05.
General Dynamics
On Jul 26, General Dynamics (GD - Free Report) reported second-quarter 2023 earnings of $2.70, which beat the Zacks Consensus Estimate of $2.59 by 4.2%. However, the figure decreased 1.8% from $2.75 per share recorded in the year-ago quarter. Amid the ongoing resilience in demand for business jets and military equipment, the company posted upbeat results. The company has a Zacks Rank #3 (Hold), along with a Value Score of B (as of Jul 31).
General Dynamic’s revenues of $10,152 million beat the Zacks Consensus Estimate of $9,413.3 million by 7.8%. The top line also improved 10.5% from that reported in the prior-year period.
Boeing
On Jul 26, Boeing (BA - Free Report) reported second-quarter 2023. The company posted mixed results, where the year-over-year downside in the bottom line can be attributed to lower defense margins. BA has a Zacks Rank #3 (Hold) with a Growth Score of B.
Boeing incurred an adjusted loss of 82 cents per share in second-quarter 2023, narrower than the Zacks Consensus Estimate of a loss of 99 cents. The bottom line deteriorated from the year-ago quarter’s reported loss of 37 cents per share.
However, BA’s revenues amounted to $19.75 billion, which beat the Zacks Consensus Estimate of $18.46 billion by 7%. The top line also improved 18% from the year-ago quarter’s reported figure of $16.68 billion. This improvement was driven by higher year-over-year revenues registered by the company’s Commercial Airplanes and Global Services business units.
ETFs in Focus
The afore-mentioned stocks have considerable exposure toAerospace – Defense ETFs. For investors looking to take a bet on upbeat Q2 results as well as a continued surge in demand for air travel, the following ETFs provide a great opportunity.
iShares U.S. Aerospace & Defense ETF (ITA - Free Report) – Up about 2.75% in the past one week (as of Jul 31)
Invesco Aerospace & Defense ETF (PPA - Free Report) – Up about 0.79% in the past one week (as of Jul 31)
SPDR S&P Aerospace & Defense ETF (XAR - Free Report) – Up about 2.47% in the past one week (as of Jul 31)