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We saw Lockheed Martin Corp. (LMT - Free Report) kick-starting the Q2 earnings season for the defense stocks this year on Jul 18, with better-than-expected quarterly numbers and raised annual view. The next day, Textron Inc. (TXT - Free Report) also came up with better-than-expected numbers but with reiterated earnings outlook. Coming to this week’s schedule, the majority of the defense giants are expected to release their financial numbers by the next three days.

As of Jul 21, 28.1% of the S&P 500 index’ market cap has reported quarterly results, revealing an 8.4% increase in earnings on 5.1% higher revenues. Overall, earnings are anticipated to record an 8.6% increase on 4.7% higher revenues, with 10 of the 16 Zacks sectors anticipating wider declines. The picture should become clearer by the end of this week, as a number of the index members are scheduled to report earnings.

Notably, projections for the Aerospace sector hint at a mixed quarter, when compared with the overall forecast for the S&P 500 cohort. Sector earnings are likely to improve 49.9% on 0.8% deterioration in revenues. For more details on quarterly releases, you can go through our Earnings Preview.

Let’s take a look at four defense majors – The Boeing Company (BA - Free Report) , General Dynamics Corp. (GD - Free Report) Northrop Grumman Corporation (NOC - Free Report) and FLIR Systems Inc. (FLIR - Free Report) – all of which are scheduled to release quarterly results before the opening bell on Jul 26.

Boeing reported a positive earnings surprise of 5.24% in the last quarter. Notably, the company outperformed the Zacks Consensus Estimate in all of the trailing four quarters, the average positive surprise being 23.69%.

Our proven model does not conclusively show an earnings beat for Boeing this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Boeing lacks the right combination of these two.

Boeing has an Earnings ESP of -0.43%. That is because the Most Accurate estimate is pegged at $2.31, lower than the Zacks Consensus Estimate of $2.32. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The company currently holds a Zacks Rank #2.

Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions (read more: What's in the Cards for Boeing this Earnings Season?).

General Dynamics reported a positive earnings surprise of 6.90% in the prior quarter. It is worth noting that the company outperformed the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 5.20%.

The Earnings ESP for General Dynamics is +0.41% because the Most Accurate estimate is $2.44, while the Zacks Consensus Estimate is pegged lower at $2.43. The company carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

General Dynamics is likely to beat earnings because it has the right combination of two key ingredients (read more: General Dynamics Q2 Earnings: Is a Beat in the Cards?).

Northrop Grumman reported a positive earnings surprise of 25.17% in the preceding quarter. It is worth noting that the company outperformed the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 10.87%.

Northrop Grumman has an Earnings ESP of -1.06%. That is because the Most Accurate estimate is pegged at $2.81, lower than the Zacks Consensus Estimate of $2.84. The company holds a Zacks Rank #2. Our proven model does not conclusively show that Northrop Grumman is likely to beat earnings this quarter (read more: What's in Store for Northrop Grumman in Q2 Earnings?).

FLIR Systems reported in-line earnings in the preceding quarter. However, the company has an average negative surprise of 2.6% over the trailing four quarters.

FLIR Systems has an Earnings ESP of +2.44%. That is because the Most Accurate estimate is pegged at 42 cents, higher than the Zacks Consensus Estimate of 41 cents. The company carries a Zacks Rank #3.

FLIR Systems is likely to beat earnings because it has the right combination of the two key ingredients (read more: Can FLIR Systems Deliver a Beat this Earnings Season?).

FLIR Systems, Inc. Price and EPS Surprise

FLIR Systems, Inc. Price and EPS Surprise | FLIR Systems, Inc. Quote

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