Back to top

Image: Bigstock

What's in Store for Aerojet Rocketdyne (AJRD) Q4 Earnings?

Read MoreHide Full Article

Aerojet Rocketdyne Holdings, Inc. (AJRD - Free Report) is expected to release fourth-quarter 2019 results soon.

In the last reported quarter, the company came up with a negative earnings surprise of 23.91%. Over the trailing four quarters, Aerojet Rocketdyne surpassed the Zacks Consensus Estimate on two occasions for as many misses, the average being 9.48%.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

For the past couple of quarters, Aerojet Rocketdyne has been witnessing a steady rise in revenues, primarily owing to improved performance in its Aerospace and Defense segment. Heightening global unrest has been driving this growth, thereby fueling demand for defense products and equipment. The company’s defense business is also developing additive manufacturing (AM) applications for hypersonic propulsion systems, which, in turn, has been spurring demand on a global scale.

Furthermore, the expansionary defense budgetary amendments undertaken by the current U.S. administration in the past couple of years have been bolstering revenues of defense players like Aerojet Rocketdyne. The company benefits largely from this, as some of its major customers, Lockheed Martin (LMT - Free Report) and Raytheon Company , have been allotted significant funds.

We anticipate the company’s soon-to-be-reported results to duly reflect these factors. In line with this, the Zacks Consensus Estimate for fourth-quarter revenues stands at $504 million, indicating a rise of 15.2% from the year-ago quarter’s reported figure.

The company has been focusing on slashing costs under its competitive improvement program (CIP). Anticipating the company to have followed similar cost-reduction moves during the fourth quarter as well, we believe its quarterly results will reflect lower expenses. This, along with the before-mentioned revenue growth forecast, suggests stellar bottom-line growth during the period in discussion.

In line with this, the Zacks Consensus Estimate for Aerojet Rocketdyne’s quarterly earnings is pegged at 45 cents, calling for a surge of 36.4% from the prior-year quarter’s reported figure.

Aerojet Rocketdyne Holdings, Inc. Price and EPS Surprise

Earnings Whispers

Our proven model does not conclusively show that Aerojet Rocketdyne is likely to beat on 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. This is not the case here, as you will see below.

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Aerojet Rocketdyne currently carries a Zacks Rank #4 (Sell).

A Stock to Consider

Here is one defense company you may want to consider, as our model shows that it has the right combination of elements to post an earnings beat this quarter:

Heico Corporation (HEI - Free Report) is expected to release first-quarter fiscal 2020 numbers soon. The company has an Earnings ESP of +8.94% and flaunts a Zacks Rank #1, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.

This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.

See their latest picks free >>