Back to top
Read MoreHide Full Article

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.

Moog Inc. Price and EPS Surprise

Moog Inc. Price and EPS Surprise | Moog Inc. Quote

More Stock News: Tech Opportunity Worth $386 Billion in 2017                

From driverless cars to artificial intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future. 

Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity.  Most importantly, it reveals 4 stocks with massive profit potential.

See these stocks now>>



More from Zacks Analyst Blog

You May Like