L3 Technologies, Inc. (LLL - Free Report) is scheduled to release first-quarter 2018 results on May 1, before the opening bell.
In the last reported quarter, the company delivered a positive earnings surprise of 2.17%. Moreover, it surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 6.61%.
Let’s see how things are shaping up prior to this announcement.
Dearth of Order: A Concern
Usually contract wins from the Pentagon as well as foreign allies of the United States drive revenues for defense contractors like L3 Technologies. Unfortunately, the company secured no notable contract during the first quarter of 2018. This in turn is likely to weigh on the company’s revenues for the to-be-reported quarter.
In line with this, the Zacks Consensus Estimate for sales indicate year-over-year decline in the two major segments of the company.
Moreover, soft commercial satellite market conditions continue to hurt aviation security and electronic systems along with commercial SATCOM and communication systems. Cumulatively, these factors are expected to drag down the company’s overall top line number.
Evidently, the Zacks Consensus Estimate for revenues is pegged at $2.33 billion, implying a 12.7% year-over-year decline.
Tax Reform: A Boon?
The latest U.S. tax reform boosted L3 Technologies’s fourth-quarter earnings per share by 99 cents. Expecting to witness similar gains in 2018 as well, the company has increased its 2018 earnings guidance. However, the company is expected to incur $15 million pension expenses during the year, which will dent its earnings growth. We believe, this along with the significant dearth of orders might impact the company’s bottom line adversely.
In line with this, the Zacks Consensus estimate for earnings shows 3.4% year-over-year decline for the upcoming quarterly result.
L3 Technologies Inc. Price and EPS Surprise