The Zacks Analyst Blog Highlights: L3, Spirit AeroSystems, Leidos, Huntington Ingalls And Boeing

For Immediate Release

Chicago, IL – May 10, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include L3 Technologies, Inc. LLL, Spirit AeroSystems, Inc. SPR, Leidos Holdings, Inc.  LDOS, Huntington Ingalls Industries, Inc. HII and Boeing BA.

Here are highlights from Wednesday’s Analyst Blog:

Defense Stock Roundup: LLL, SPR, BA & More

With more than 409 S&P 500 companies having released their quarterly results, the Q1 earnings season is set to enter its last leg. As of May 4, of these 409 index members which revealed their earnings numbers, 78% delivered an earnings beat, while 75.6% surpassed revenue estimates.

Coming to the Zacks Aerospace sector’s performance for Q1, projections for stocks in this space indicate improvement over the prior-quarter’s performance. Notably, earnings of this space are expected to improve 37.8% on 7.8% higher sales, compared to fourth-quarter’s earnings growth of 31.8% on 7.3% sales increase.

Such upbeat projections provided a major impetus to the defense stocks over the last five trading sessions. Consequently, major indices of the Aerospace-Defense space — the S&P 500 Aerospace & Defense (Industry) index as well as the Dow Jones U.S. Aerospace & Defense index rose 3.2% over the aforementioned period.

As expected, quarterly results from a number of Aerospace-Defense majors — L3 Technologies, Inc., Spirit AeroSystems, Inc., Leidos Holdings, Inc. and Huntington Ingalls Industries, Inc. — remained a key area of investors focus. In other news, Boeing is set to buy KLX.

Recap of Last Week’s Key Stories

1. L3 Technologies posted first-quarter 2018 earnings of $2.34 per share from continuing operations, surpassing the Zacks Consensus Estimate of $1.99 by 2.2%. In the quarter under review, total revenues came in at $2.37 billion outpacing the Zacks Consensus Estimate of $2.33 billion by 1.7%.

Funded orders in first-quarter were $2.6 billion, reflecting a 10% rise compared with the last year. Funded backlog was $8.8 billion as of Mar 30, 2018, up 3% from $8.5 billion as of Dec 31, 2017.

L3 Technologies now expects its 2018 earnings in the range of $9.40-$9.60 per share compared with $9.30-$9.50 guided earlier (read more: L3 Technologies Beats on Q1 Earnings, Ups '18 EPS View).

2. Spirit AeroSystems reported first-quarter 2018 earnings of $1.10 per share, which missed the Zacks Consensus Estimate of $1.35 by 18.5%. Total revenues of $1,736 million in the first quarter surpassed the Zacks Consensus Estimate of $1,703 million by 2%.

As of Mar 29, 2018, Spirit AeroSystems had $437.9 million in cash and cash equivalents compared with $423.3 as of Dec 31, 2017.

Spirit AeroSystems reiterated financial guidance for 2018 (read more: Spirit AeroSystems Q1 Earnings Miss, Revenues Up Y/Y).

3. Leidos Holdings reported first-quarter 2018 adjusted earnings of $1.03 per share, which came in line with the Zacks Consensus Estimate. The company posted total revenues of $2,443 million in the quarter, which missed the Zacks Consensus Estimate of $2,596 million by 5.9%.

At the end of the first quarter, the company’s backlog of signed business orders was $17.6 billion, of which $4.6 billion was funded.

Leidos Holdings continues to expect adjusted earnings per share in the range of $4.15-$4.50 on revenues of $10.25-$10.65 billion (read more: Leidos Holdings Q1 Earnings Meet Estimates, Sales Lag).

4. Huntington Ingalls’ first-quarter 2018 earnings of $3.48 per share missed the Zacks Consensus Estimate of $4.07 by 14.5%.Total revenues came in at $1.87 billion, which surpassed the Zacks Consensus Estimate of $2.01 billion by 6.2%.

Huntington Ingalls received new orders worth $2.6 billion in first quarter. As a result, the company’s total backlog reached $22 billion as of Mar 31, 2018.

Cash from operating activities, at the end of first-quarter 2018, was $120 million compared with $98 million at the end of 2017’s first quarter (read more: Huntington Ingalls Q1 Earnings Miss, Revenues Up Y/Y).

5. Boeing announced on May 1 that the company has signed an agreement to purchase aerospace solutions provider — KLX Inc. — for $4.25 billion, in an attempt to enhance its services business.

KLX is a major independent provider of aviation parts and services in the aerospace industry. No doubt its addition will enable Boeing to support all customer fleet types for the commercial, military and defense and business and general aviation markets.

Boeing expects the takeover to have a neutral earnings impact through 2019 and accretion thereafter, with annual cost savings growing to approximately $70 million by 2021 and further improvements realized over time. The deal is expected to be over by third quarter of 2018.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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The Boeing Company (BA): Free Stock Analysis Report
 
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Leidos Holdings, Inc. (LDOS): Free Stock Analysis Report
 
Spirit Aerosystems Holdings, Inc. (SPR): Free Stock Analysis Report
 
L3 Technologies Inc. (LLL): Free Stock Analysis Report
 
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