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Orbital ATK (OA) Q2 Earnings and Revenues Beat Estimates

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Orbital ATK, Inc. posted second-quarter 2017 adjusted earnings of $1.56 per share, beating the Zacks Consensus Estimate of $1.45 by 7.6%. However, earnings decreased 6.6% year over year from $ 1.67 per share.

Reported earnings decreased due to reduction in favorable contract profit adjustments this year.

Total Revenue

Orbital ATK's total revenue in the second quarter came in at $1,115 million, beating the Zacks Consensus Estimate of $1,113 million by 0.2%.

Moreover, reported revenues were 2.9% higher than the year-ago figure of $1,084 million primarily due to improved sales from Flight Systems Group and Space Systems Group. This was partially offset by lower revenues from Defense Systems Group.

Orbital ATK, Inc. Price, Consensus and EPS Surprise

Orbital ATK, Inc. Price, Consensus and EPS Surprise | Orbital ATK, Inc. Quote


Segmental Update

Flight Systems Group: Segment sales were up 13.6% year over year to $425 million owing to higher activity in the Aerospace Structures Division and increased production for both the government and commercial aircraft programs.

Defense Systems Group: The segment reported sales of $ 424 million, down nearly 6.6% year over year due to the impact of the Lake City facility production slowdown during the months of April and May. However, this was offset by increased revenue in the remainder of the segment.

Space Systems Group: The segment reported sales of $302 million, up 8.2% year over year, due to higher activity on government satellite programs. This rise was partially offset by decreased activity on commercial satellite programs.

Highlights of the Release

Total adjusted operating income in the quarter under review fell 8% to $135.7 million from $147.5 million year over year.

As of July 2, Orbital ATK's firm backlog was approximately $9.5 billion, up 10% year over year. Total backlog (including options, indefinite quantity contracts and undefinitized orders) was approximately $15.4 billion, up 4%.

Financial Highlights

Cash (used in) provided from operating activities during the quarter was ($4.3) million compared with $145.2 million provided in the year ago quarter.

Capital expenditure was $51.5 million in the quarter up from $38 million in the year ago quarter.


The company raised its 2017 earnings per share guidance in the range of $5.95–$6.25 from $5.80–$6.20. Revenues guidance has been raised to the range of $4,600–$4,650 million from $4,550–$4,625 million.

Free cash flow has been reiterated between $250 million and $300 million.

Zacks Rank

Orbital ATK currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peers Release

AAR Corp. (AIR - Free Report) reported fourth-quarter fiscal 2017 earnings of 44 cents per share, which surpassed the Zacks Consensus Estimate of 43 cents by 2.3%.

Triumph Group Inc.’s (TGI - Free Report) adjusted earnings from continuing operations in first-quarter fiscal 2018 (ended Jun 30) came in at 24 cents per share, missing the Zacks Consensus Estimate of 87 cents by 72.4%.

Raytheon Company (RTN - Free Report) reported second-quarter 2017 adjusted earnings from continuing operations of $1.98 per share, beating the Zacks Consensus Estimate of $1.74 by 13.8%.

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