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Will Higher Operating Expenses Hit Rocket Lab (RKLB) Q1 Earnings?
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Rocket Lab USA, Inc. (RKLB - Free Report) is scheduled to report first-quarter 2024 results on May 6, after market close.
RKLB delivered a negative earnings surprise of 11.11% in the last reported quarter. Robust revenues from both of its business segments are likely to have contributed to the overall quarterly performance. However, higher operating expenses might have hurt the bottom line.
Launch Services to Show Growth
An increasing number of launch services contracts won in the prior quarters, along with a favorable increase in the average selling price of the company’s launch services, is likely to have aided its Launch Services segment’s top line. Higher launch cadence, backed by the successful completion of the electron missions launch, must have also boosted this segment’s quarterly revenues.
The consensus estimate for this unit’s first-quarter revenues is pegged at $32.4 million, implying an improvement of 65.1% from the year-ago quarter’s reported figure.
Solid sales volume from growth in RKLB’s spacecraft component business might have boosted the Space Systems segment’s top-line performance.
The consensus estimate for this unit’s first-quarter revenues is pegged at $64.2 million, implying an improvement of 82.1% from the year-ago quarter’s reported figure.
Other Factors
Keeping up with the trend witnessed in 2023, Rocket Lab can be expected to have signed multi-launch Electron deals with government and commercial partners, along with strong bookings for its Hypersonic Accelerator Suborbital Test Electron (HASTE), in the first quarter. This, in turn, is likely to have resulted in a solid backlog count for RKLB.
Rocket Lab can be expected to have incurred higher year-over-year operating expenses in the first quarter, owing to an increase in staff costs (within space systems and Neutron) and a rise in prototyping and materials-related expenses. Also, an increase in headcount, along with a rise in outside services expenses, can be projected to have pushed up the company’s operating expenses.
Q1 Estimates
Solid revenue growth expected from both of its segments can be projected to have bolstered its overall revenues. The Zacks Consensus Estimate for RKLB’s first-quarter revenues is pegged at $95.8 million, indicating an increase of 74.6% from the year-ago quarter’s level.
Solid revenue growth is likely to have aided the company’s bottom-line performance amid the adverse impacts of higher operating expenses.
The Zacks Consensus Estimate for first-quarter earnings is pegged at a loss of 11 cents per share, indicating a slight deterioration from the prior-year quarter’s reported loss of 10 cents.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for RKLB this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.
Rocket Lab has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell) at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Below are two defense stocks that have the right combination of elements to post an earnings beat this reporting cycle.
Embraer delivered an earnings surprise of 55.56% in the last reported quarter. The consensus estimate for first-quarter earnings is pegged at a loss of 11 cents per share, while that for sales is pinned at $855.7 million.
CAE Inc. (CAE - Free Report) is scheduled to release fourth-quarter fiscal 2024 results soon. CAE has an Earnings ESP of +1.07% and a Zacks Rank #3 at present.
CAE delivered a four-quarter average earnings surprise of 13.33%. The Zacks Consensus Estimate for CAE’s fiscal fourth-quarter earnings is pegged at 31 cents per share, while that for sales is pinned at $957.3 million.
A Recent Defense Release
Lockheed Martin Corporation (LMT - Free Report) reported first-quarter 2024 adjusted earnings of $6.33 per share, which beat the Zacks Consensus Estimate of $5.80 by 9.1%. The bottom line, however, declined 1.6% from the year-ago quarter's recorded figure of $6.43.
LMT’s net sales were $17.20 billion, which surpassed the Zacks Consensus Estimate of $16.19 billion by 6.2%. The top line also increased 13.7% from $15.13 billion reported in the year-ago quarter.
Image: Bigstock
Will Higher Operating Expenses Hit Rocket Lab (RKLB) Q1 Earnings?
Rocket Lab USA, Inc. (RKLB - Free Report) is scheduled to report first-quarter 2024 results on May 6, after market close.
RKLB delivered a negative earnings surprise of 11.11% in the last reported quarter. Robust revenues from both of its business segments are likely to have contributed to the overall quarterly performance. However, higher operating expenses might have hurt the bottom line.
Launch Services to Show Growth
An increasing number of launch services contracts won in the prior quarters, along with a favorable increase in the average selling price of the company’s launch services, is likely to have aided its Launch Services segment’s top line. Higher launch cadence, backed by the successful completion of the electron missions launch, must have also boosted this segment’s quarterly revenues.
The consensus estimate for this unit’s first-quarter revenues is pegged at $32.4 million, implying an improvement of 65.1% from the year-ago quarter’s reported figure.
Rocket Lab USA, Inc. Price and EPS Surprise
Rocket Lab USA, Inc. price-eps-surprise | Rocket Lab USA, Inc. Quote
Space Systems: Another Key Growth Catalyst
Solid sales volume from growth in RKLB’s spacecraft component business might have boosted the Space Systems segment’s top-line performance.
The consensus estimate for this unit’s first-quarter revenues is pegged at $64.2 million, implying an improvement of 82.1% from the year-ago quarter’s reported figure.
Other Factors
Keeping up with the trend witnessed in 2023, Rocket Lab can be expected to have signed multi-launch Electron deals with government and commercial partners, along with strong bookings for its Hypersonic Accelerator Suborbital Test Electron (HASTE), in the first quarter. This, in turn, is likely to have resulted in a solid backlog count for RKLB.
Rocket Lab can be expected to have incurred higher year-over-year operating expenses in the first quarter, owing to an increase in staff costs (within space systems and Neutron) and a rise in prototyping and materials-related expenses. Also, an increase in headcount, along with a rise in outside services expenses, can be projected to have pushed up the company’s operating expenses.
Q1 Estimates
Solid revenue growth expected from both of its segments can be projected to have bolstered its overall revenues. The Zacks Consensus Estimate for RKLB’s first-quarter revenues is pegged at $95.8 million, indicating an increase of 74.6% from the year-ago quarter’s level.
Solid revenue growth is likely to have aided the company’s bottom-line performance amid the adverse impacts of higher operating expenses.
The Zacks Consensus Estimate for first-quarter earnings is pegged at a loss of 11 cents per share, indicating a slight deterioration from the prior-year quarter’s reported loss of 10 cents.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for RKLB this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.
Rocket Lab has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell) at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Below are two defense stocks that have the right combination of elements to post an earnings beat this reporting cycle.
Embraer S.A. (ERJ - Free Report) is slated to release first-quarter results on May 7. ERJ has an Earnings ESP of +90.63% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Embraer delivered an earnings surprise of 55.56% in the last reported quarter. The consensus estimate for first-quarter earnings is pegged at a loss of 11 cents per share, while that for sales is pinned at $855.7 million.
CAE Inc. (CAE - Free Report) is scheduled to release fourth-quarter fiscal 2024 results soon. CAE has an Earnings ESP of +1.07% and a Zacks Rank #3 at present.
CAE delivered a four-quarter average earnings surprise of 13.33%. The Zacks Consensus Estimate for CAE’s fiscal fourth-quarter earnings is pegged at 31 cents per share, while that for sales is pinned at $957.3 million.
A Recent Defense Release
Lockheed Martin Corporation (LMT - Free Report) reported first-quarter 2024 adjusted earnings of $6.33 per share, which beat the Zacks Consensus Estimate of $5.80 by 9.1%. The bottom line, however, declined 1.6% from the year-ago quarter's recorded figure of $6.43.
LMT’s net sales were $17.20 billion, which surpassed the Zacks Consensus Estimate of $16.19 billion by 6.2%. The top line also increased 13.7% from $15.13 billion reported in the year-ago quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.