Defense bellwethers – Northrop Grumman Corp. (NOC - Free Report) , The Boeing Company (BA - Free Report) and General Dynamics Corp. (GD - Free Report) – came up with their second-quarter results yesterday. While Boeing and Northrop posted better-than-expected earnings figures, General Dynamics reported in-line earnings. Today, a couple of other two defense biggies – Raytheon Company (RTN - Free Report) and L3 Technologies, Inc. (LLL - Free Report) – will release their second-quarter financial numbers.
As of Jul 26, we have got quarterly results from 44.1% of the S&P 500 index’ market cap. Out of this, 78.9% came up with an earnings beat, while 70.8% surpassed revenue estimates. Overall, earnings are now expected to record an 8.7% increase on 4.7% higher revenues, with 12 of the 16 Zacks sectors expecting positive earnings growth. The picture should become clearer by the end of this week, as a number of the index members are scheduled to report earnings.
As far as the Aerospace sector is concerned, 60% of the stocks in this space have reported quarterly results as of Jul 26. Of them, 83.3% came up with an earnings beat, while 50% exceeded revenue estimates. For Q2 as a whole, sector earnings are likely to improve 56.9% on 1.1% deterioration in revenues. For more details on quarterly releases, you can go through our Earnings Outlook.
Let’s take a look at defense primes, Rockwell Collins, Inc. (COL - Free Report) and Moog Inc. (MOG.A - Free Report) , which are scheduled to release quarterly results before the opening bell on Jul 28.
Rockwell Collins reported a positive earnings surprise of 2.29% in the last quarter. Notably, the company outperformed the Zacks Consensus Estimate in all of the trailing four quarters, the average positive surprise being 2.45%.
Our proven model does not conclusively show an earnings beat for Rockwell Collins 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. The company lacks the right combination of these two.
Rockwell Collins has an Earnings ESP of -1.27%. That is because the Most Accurate estimate is pegged at $1.56, lower than the Zacks Consensus Estimate of $1.58. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The company currently carries a Zacks Rank #3.
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 to Expect From Rockwell Collins in Q3 Earnings?).
Moog reported a positive earnings surprise of 3.53% 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 18.28%.
The Earnings ESP for Moog is 0.00%, because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 88 cents. The company carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Our proven model does not conclusively show that Moog is likely to beat earnings this quarter.
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