Alliant (ATK) Beats Earnings Estimates On Lower Share Count - Analyst Blog

Alliant Techsystems Inc. (ATK) reported third-quarter fiscal 2015 adjusted earnings of $3.02 per share, surpassing the Zacks Consensus Estimate of $2.89 by 4.5%. Quarterly earnings increased 5.2% year over year primarily on the back of a decline in share count and higher revenues.

The company’s quarterly GAAP earnings per share were $1.43 compared with $2.46 a year ago. The difference between adjusted and GAAP earnings was due to the combined per share effect of a goodwill/trade name impairment charge of $1.50 and transaction cost of 9 cents.

Total Revenue

In the quarter under review, total revenue came in at $1,251.4 million, missing the Zacks Consensus Estimate of $1,252 million marginally. The reported revenues, however, exceeded the year-ago figure by 3.6% primarily due to higher contribution from the Defense Group (2.4%) and Aerospace Group (2.1%) segments. This was partially offset by a lower contribution from Sporting Group segment (3.3%).

Operational Highlights

In the third quarter of fiscal 2015, Alliant’s orders decreased to $1 billion from $1.3 billion a year ago due to lower orders in Aerospace Group and Sporting Group. The company’s backlog stood at $6.7 billion.

Cost of sales increased 3.1% year over year to $947.5 million in the reported quarter.

The company reported gross profit of $303.8 million in the quarter, up 5.1% from the prior-year level.

Total operating expenses increased 2.6% year over year to $146.9 million, primarily due to higher research and development, and selling expenses.

The company’s interest expenses decreased 24.9% year over year to $21.4 million.

Financial Update

As of Dec 28, 2014, Alliant had cash and cash equivalents of $112.9 million compared with $266.6 million as of Mar 31, 2014.

Long-term debt, as of Dec 28, 2014, was $1,908.5 million versus $1,843.8 million in fiscal 2014 end.

During the first nine months of fiscal 2015, cash from operating activities was $154.2 million versus $222.3 million in the year-ago period.

Alliant’s capital expenditure was $92.0 million during the nine months ended Dec 28, 2014 versus $80.6 million in the prior-year period.

Business Update

On Jan 27, 2015, stockholders of Alliant approved the issuance of shares to the stockholders of Orbital Sciences Corporation (ORB) in connection with a proposed merger. Orbital stockholders also approve of the merger. Upon customary approvals, Alliant expects to conclude the transaction on Feb 9, 2015.

Another Peer Release

Triumph Group Inc.’s (TGI) adjusted earnings from continuing operations for fiscal third-quarter 2015, ended Dec 31, 2014, came in at $1.42 per diluted share, which missed the Zacks Consensus Estimate by 2.1%.

Zacks Rank

Alliant currently holds a Zacks Rank #4 (Sell). A better-ranked stock in the same industry is Spirit AeroSystems Holdings, Inc. (SPR), carrying a Zacks Rank #1 (Strong Buy).

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