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Last week, the Wall Street saw second-quarter earnings releases from a handful of the defense biggies like L-3 Technologies, Inc. (LLL - Free Report) , Raytheon Co. (RTN - Free Report) and Rockwell Collins, Inc. (COL - Free Report) , to name a few. Notably, most of these corporations came up with an earnings beat this quarter.

We have already crossed the halfway mark of second-quarter 2017 earnings, with 57.6% or 286 of the S&P 500 index members having released their earnings report as of Jul 28. Reported earnings were up 11.3% year over year on 6.1% higher revenues. Among them, 74.5% surpassed earnings estimates while 69.2% topped revenue estimates.

For the remaining 214 index members, combined with 286 members that have already reported, earnings are estimated to improve 9.2% on 5% higher revenues this season, compared to last year, with four of the 16 Zacks sectors witnessing growth in the negative territory. Notably, this could be the fourth straight quarter to record earnings growth after five quarters of back-to-back declines.

With over 1000 companies scheduled to report results this week, including 130 S&P 500 members, we believe this season to be a busy one. Now, let us focus on the defense sector as it is expected to see quite a few of the major defense contractors coming up with their financial numbers.

In the Aerospace and Defense space, 96.7% of the index’s market cap has reported quarterly results as of Jul 28, with 88.9% beating on earnings and 66.7% exceeding revenue expectations. Undoubtedly, such bullish releases raise hopes of a much better performance for the sector, as we move into the second half of the second-quarter reporting cycle. In fact, projections are of a 59.9% surge in earnings despite 0.8% revenue deterioration. For more details on quarterly releases, you can go through the Earnings Preview.

Let’s take a look at three defense companies – Huntington Ingalls Industries, Inc. (HII - Free Report) , Leidos Holdings, Inc. (LDOS - Free Report) and Engility Holdings, Inc. (EGL - Free Report) , which are scheduled to release second-quarter results on Aug 3.

Huntington Ingalls saw a negative earnings surprise of 31.25% in the last quarter. However, the company surpassed the Zacks Consensus Estimate in two of the last four quarters, with an average positive earnings surprise of 3.04%.

Our proven model shows that Huntington Ingalls is likely to beat earnings 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 and the company has the right mix. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter

This stock has an Earnings ESP of +4.96% as the Most Accurate estimate is pegged at $2.75, higher than the Zacks Consensus Estimate of $2.62. Moreover, it currently holds a Zacks Rank #2. (Read more: Huntington Ingalls Q2 Earnings: A Beat in the Cards?)

Leidos Holdings is a Zacks Rank #3 company, which pulled off a positive earnings surprise of 12.82% in the last quarter. However, the company surpassed the Zacks Consensus Estimate in two of the last four quarters, with an average positive earnings surprise of 7.54%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company has an Earnings ESP of +1.30% as the Most Accurate estimate is 78 cents, while the Zacks Consensus Estimate is pegged lower at 77 cents. This makes us reasonably confident of an earnings beat this quarter.

Lastly, Engility Holdings which is a Zacks Rank #4 (Sell) company, came up with a positive earnings surprise of 37.50% in the prior quarter. Notably, the company surpassed the Zacks Consensus Estimate in the last four quarters, with an average earnings surprise of 25.57%.

However, the company has an Earnings ESP of +7.84% as the Most Accurate estimate is 55 cents, while the Zacks Consensus Estimate is pegged lower at 51 cents. This complicates our surprise prediction for Engility Holdings in this quarter.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

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