We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Defense Stocks to Post Q3 Earnings on Oct 26: RTN & LLL
Read MoreHide Full Article
The Q3 earnings season has begun on an optimistic note, with 87 S&P 500 participants (24.7% of the total market cap) reporting encouraging numbers as of Oct 20.
Per our latest Earnings Preview, total earnings for these members rose 9.4% on 7.3% higher revenues. The earnings beat ratio for these members was 71.3%, while that for top line was 70.1%.
Coming to the Aerospace-Defense industry, Lockheed Martin Corporation (LMT - Free Report) released its quarterly result on Oct 24, wherein the company's earnings were lower than what most analysts had expected. Nevertheless, with several other defense behemoths set to report third-quarter numbers this week and considering the favorable budget trend prevailing in this industry, we may expect the industry’s earnings scenario to improve.
Notably, projections for the Aerospace sector (one of the 16 Zacks sectors), which constitutes the Aerospace-Defense industry, hint at a mixed quarter, when compared to the overall Q3 forecast for the S&P 500 cohort. The Sector’s earnings are likely to decline 12.9% on 5.3% higher revenues; while earnings for S&P 500 members are likely to rise 2.6% on 5% higher revenues, as of Oct 20.
Interestingly, defense stocks in the third quarter reached new-all-time highs for multiple times, courtesy of the varied supportive defense policy initiatives adopted by President Trump. In particular, the favorable budgetary amendments made by the U.S. government, like the passing of the fiscal 2018 defense policy bill worth $700 million, have boosted the growth prospects of defense stocks. A steady flow of contracts from Pentagon to ‘rebuild’ the U.S. Army also provided an impetus to the stocks. With Trump strongly opposing the budget sequestration imposed by his predecessor, defense stocks are surely to gain traction in the near term.
With 180 S&P 500 members lined up for their quarterly results release this week, let’s take a look at two defense majors — Raytheon Company and L3 Technologies, Inc. — both of which are scheduled to release quarterly results before the opening bell on Oct 26.
Raytheon’s Missile Systems segment is a major growth driver. The third quarter is also poised to benefit from this unit, on the back of contract wins for its product line. Notably, the Zacks Consensus Estimate for third-quarter sales is $1,980 million for the segment, reflecting year-over-year growth of 13.2%.
Apart from its strong forte in the domestic front, international business expansion has also been another significant growth driver for Raytheon. The company is currently witnessing strong demand for varied product line not only from the Middle East but also from Asia Pacific. We believe once the company reports third-quarter results, these nations’ contribution to Raytheon’s growth story will become clearer.
Moreover, during second-quarter earnings call, Raytheon’s management raised its EPS guidance to reflect the company’s improved operating performance alongside expecting the bottom line to grow in the third quarter. In line with this our consensus estimate for Raytheon’s earnings is pegged at $1.90 per share, reflecting annual growth of 6.4%.
Our proven model shows that Raytheon is likely to beat earnings this quarter. Notably, 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. Conversely, 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.
Raytheon has the right combination of a favorable Zacks Rank and a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
L3 Technologies expects sales of roughly $2.7 billion in the to-be-reported quarter, which reflects about 6% organic growth. While operating margin is anticipated to lie in the mid-9% range, earnings per share is projected to be between $1.85 and $1.95.
However, the company expects Aerospace Systems segment to decline in the third quarter compared with the first half of 2017. This is primarily due to certain contract price modifications at Vertex sliding into the fourth quarter of 2016, and sales mix in Intelligence, Surveillance & Reconnaissance as well as aircraft systems.
Moreover, our proven model does not conclusively shows that L3 Technologies is likely to beat earnings this quarter. This is becausethe company currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of 0.00%. Both of its Most Accurate estimate as well as the Zacks Consensus Estimate are pegged at $1.94 (read more: L3 Technologies Q3 Earnings: What's in the Cards?).
Stay tuned! Check later for our full write-up on earnings releases of these stocks.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Image: Bigstock
Defense Stocks to Post Q3 Earnings on Oct 26: RTN & LLL
The Q3 earnings season has begun on an optimistic note, with 87 S&P 500 participants (24.7% of the total market cap) reporting encouraging numbers as of Oct 20.
Per our latest Earnings Preview, total earnings for these members rose 9.4% on 7.3% higher revenues. The earnings beat ratio for these members was 71.3%, while that for top line was 70.1%.
Coming to the Aerospace-Defense industry, Lockheed Martin Corporation (LMT - Free Report) released its quarterly result on Oct 24, wherein the company's earnings were lower than what most analysts had expected. Nevertheless, with several other defense behemoths set to report third-quarter numbers this week and considering the favorable budget trend prevailing in this industry, we may expect the industry’s earnings scenario to improve.
Notably, projections for the Aerospace sector (one of the 16 Zacks sectors), which constitutes the Aerospace-Defense industry, hint at a mixed quarter, when compared to the overall Q3 forecast for the S&P 500 cohort. The Sector’s earnings are likely to decline 12.9% on 5.3% higher revenues; while earnings for S&P 500 members are likely to rise 2.6% on 5% higher revenues, as of Oct 20.
Interestingly, defense stocks in the third quarter reached new-all-time highs for multiple times, courtesy of the varied supportive defense policy initiatives adopted by President Trump. In particular, the favorable budgetary amendments made by the U.S. government, like the passing of the fiscal 2018 defense policy bill worth $700 million, have boosted the growth prospects of defense stocks. A steady flow of contracts from Pentagon to ‘rebuild’ the U.S. Army also provided an impetus to the stocks. With Trump strongly opposing the budget sequestration imposed by his predecessor, defense stocks are surely to gain traction in the near term.
With 180 S&P 500 members lined up for their quarterly results release this week, let’s take a look at two defense majors — Raytheon Company and L3 Technologies, Inc. — both of which are scheduled to release quarterly results before the opening bell on Oct 26.
Raytheon’s Missile Systems segment is a major growth driver. The third quarter is also poised to benefit from this unit, on the back of contract wins for its product line. Notably, the Zacks Consensus Estimate for third-quarter sales is $1,980 million for the segment, reflecting year-over-year growth of 13.2%.
Apart from its strong forte in the domestic front, international business expansion has also been another significant growth driver for Raytheon. The company is currently witnessing strong demand for varied product line not only from the Middle East but also from Asia Pacific. We believe once the company reports third-quarter results, these nations’ contribution to Raytheon’s growth story will become clearer.
Moreover, during second-quarter earnings call, Raytheon’s management raised its EPS guidance to reflect the company’s improved operating performance alongside expecting the bottom line to grow in the third quarter. In line with this our consensus estimate for Raytheon’s earnings is pegged at $1.90 per share, reflecting annual growth of 6.4%.
Our proven model shows that Raytheon is likely to beat earnings this quarter. Notably, 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. Conversely, 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.
Raytheon has the right combination of a favorable Zacks Rank and a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Raytheon currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here. The company has an Earnings ESP of +0.05% because the Most Accurate estimate is pegged at $1.91, while the Zacks Consensus Estimate is $1.90 (read more: Can Missile Systems Unit Drive Raytheon's Q3 Earnings?).
Raytheon Company Price and EPS Surprise
Raytheon Company Price and EPS Surprise | Raytheon Company Quote
L3 Technologies expects sales of roughly $2.7 billion in the to-be-reported quarter, which reflects about 6% organic growth. While operating margin is anticipated to lie in the mid-9% range, earnings per share is projected to be between $1.85 and $1.95.
However, the company expects Aerospace Systems segment to decline in the third quarter compared with the first half of 2017. This is primarily due to certain contract price modifications at Vertex sliding into the fourth quarter of 2016, and sales mix in Intelligence, Surveillance & Reconnaissance as well as aircraft systems.
Moreover, our proven model does not conclusively shows that L3 Technologies is likely to beat earnings this quarter. This is becausethe company currently carries a Zacks Rank #4 (Sell) and has an Earnings ESP of 0.00%. Both of its Most Accurate estimate as well as the Zacks Consensus Estimate are pegged at $1.94 (read more: L3 Technologies Q3 Earnings: What's in the Cards?).
L-3 Technologies, Inc. Price and EPS Surprise
L-3 Technologies, Inc. Price and EPS Surprise | L-3 Technologies, Inc. Quote
Stay tuned! Check later for our full write-up on earnings releases of these stocks.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>