Aerospace Stocks Q1 Earnings Due On May 3: HII, OA & More

Over the last week, Wall Street saw first-quarter 2018 earnings releases from several defense biggies like Lockheed Martin, Boeing, Northrop Grumman and General Dynamics. L-3 Technologies LLL kick-started this week by reporting better-than-expected result for the first quarter. Today, Spirit AeroSystems SPR is set to release Q1 numbers.

As of Apr 27, 267 S&P 500 members announced their quarterly numbers, whose earnings improved 25.1%, while revenues increased 107.5%. Notably, the beat ratio for the bottom line was 76.8%, while that for top line was 73.8%.

Therefore, the results reflect a strong show so far, with Q1 earnings and revenue growth on track to reach its highest level in seven years.

Coming to the Zacks Aerospace sector, projections for the stocks in this space, hint at an impressive quarter, when compared to its fourth-quarter performance. Evidently, the sector's earnings are likely to improve 37.3% on 7.5% higher revenues in the first quarter, whereas fourth-quarter earnings for this sector improved 31.8% on 7.3% revenue growth. For more details on quarterly releases, you can go through our latest Earnings Preview.

Stocks in the aerospace-defense space remained on a growth trajectory in the first quarter, courtesy of fiscal 2019 defense budget proposal presented by President Trump. Of the total amount, $686.1 billion has been reserved as funding for the Pentagon, reflecting 5% real growth over the initial FY18 budget and 10% real growth over the current Continuing Resolution. A steady flow of contracts from the Pentagon also provided an impetus to the stocks. Moreover, growing international market for weaponries with several nations increasing their defense spending is also likely to fuel the industry’s growth.

With almost 921 companies (142 S&P 500 members) are slated to report first-quarter results this week, let's take a look at how the following defense stocks are poised before their earnings release on May 3.

Huntington Ingalls Industries, Inc. HII delivered a positive earnings surprise of 6.51% in the last reported quarter. The company outperformed the Zacks Consensus Estimate in three of the trailing four quarters, with an average beat of 3.85%.

Huntington Ingalls’ Newport News segment, which generates more than 50% of the company’s total revenues, has been underperforming for the last few years. However, in the last few reported quarters, this segment’s top line has rebounded.

In line with this, the Zacks Consensus Estimate for Newport News unit’s first-quarter revenues stands at $1,012 million, reflecting an annual improvement of 4.2%. A steady inflow of orders from the Pentagon has always provided an impetus to Huntington Ingalls’ results. However, in the first quarter, the company did not win any notable contracts.

Per our proven model, a stock is likely to beat earnings estimate if it has a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Unfortunately, Huntington Ingalls does not constitute that combination.

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.

Huntington Ingalls currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

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 (read more: Will Tax Reform Boost Huntington Ingalls Q1 Earnings?).

 

 

Leidos Holdings, Inc. LDOS posted a positive earnings surprise of 4.82% in the last reported quarter. The company outperformed the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 17.86%.

The Zacks Consensus Estimate for the company’s first-quarter revenues is pegged at $2.60 billion, reflecting a year-over-year increase of 0.6%. The same for the quarterly earnings is pegged at $1.03 per share, which represents 17.1% annual improvement.

The Earnings ESP for Leidos Holdings is 0.00%. The company currently carries a Zacks Rank #3. Therefore, our model indicates that the company is unlikely to beat on earnings this quarter.

 

Leidos Holdings, Inc. Price and EPS Surprise

 

Leidos Holdings, Inc. Price and EPS Surprise | Leidos Holdings, Inc. Quote

 

Orbital ATK, Inc. OA posted a negative earnings surprise of 3.80% in the last reported quarter. However, the company outperformed the Zacks Consensus Estimate in two of the trailing four quarters, with an average beat of 1.60%.

The Zacks Consensus Estimate for the company’s first-quarter revenues is pegged at $1.13 billion, reflecting a year-over-year increase of 4.5%. The same for the quarterly earnings is pegged at $1.50 per share, which represents 22% annual improvement.

The Earnings ESP for Orbital ATK is 0.00%. The company currently carries a Zacks Rank #3. Therefore, our model indicates that the company is unlikely to beat on earnings this quarter.

 

Orbital ATK, Inc. Price and EPS Surprise

 

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

 

Teledyne Technologies Incorporated TDY posted a positive earnings surprise of 13.22% in the last reported quarter. The company outperformed the Zacks Consensus Estimate in the trailing four quarters, with an average beat of 35.36%.

The Zacks Consensus Estimate for the company’s first-quarter revenues is pegged at $651.5 million, reflecting a year-over-year increase of 15.1%. The same for the quarterly earnings is pegged at $1.55 per share, which represents 23% annual improvement.

The Earnings ESP for Teledyne Technologies is 0.00%. The company currently carries a Zacks Rank #3. Therefore, our model indicates that the company is unlikely to beat on earnings this quarter.

 

 

Esterline Technologies Corporation ESL posted a positive earnings surprise of 28.95% in the last reported quarter. The company outperformed the Zacks Consensus Estimate in two of the trailing four quarters, with an average beat of 6.73%.

The Zacks Consensus Estimate for the company’s first-quarter revenues is pegged at $508.6 million, reflecting a year-over-year drop of 0.1%. The same for the quarterly earnings is pegged at 73 cents per share, which represents 39.2% annual decline.

The Earnings ESP for Esterline Technologies is 0.00%. The company currently carries a Zacks Rank #3. Therefore, our model indicates that the company is unlikely to beat on earnings this quarter.

 

 

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Huntington Ingalls Industries, Inc. (HII): Free Stock Analysis Report
 
Leidos Holdings, Inc. (LDOS): Free Stock Analysis Report
 
Esterline Technologies Corporation (ESL): Free Stock Analysis Report
 
Spirit Aerosystems Holdings, Inc. (SPR): Free Stock Analysis Report
 
Teledyne Technologies Incorporated (TDY): Free Stock Analysis Report
 
Orbital ATK, Inc. (OA): Free Stock Analysis Report
 
L3 Technologies Inc. (LLL): Free Stock Analysis Report
 
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