We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Key Predictions for Q4 Earnings Reports of RTN, NOC, LLL
Read MoreHide Full Article
The fourth-quarter earnings season is well under way with 53 S&P 500 members having reported their quarterly numbers as of Jan 19. So far, the earnings trend appears impressive with tax cuts driving the results.
Quarterly earnings of the 53 S&P members have improved 11.7% while revenues increased 7.5%. The beat ratio for the bottom line was 81.1% while that for top line was 75.5%, as of Jan 19.
Coming to the Zacks Aerospace-Defense industry , none of the stocks have reported results so far. However, considering the inherent stability of this industry, projections for the Aerospace sector (one of the 16 Zacks sector), which constitutes the Aerospace-Defense industry, hint at an impressive quarter, when compared to its third-quarter performance.
Evidently, the sector's earnings are likely to improve 6.6% on 5.7% higher revenues in the fourth quarter. Third-quarter earnings for this sector declined 6.8%. For more details on quarterly releases, you can go through our latest Earnings Preview .
Defense stocks remained on a growth trajectory in the fourth quarter, courtesy of the various defense policy initiatives adopted by President Trump. A steady flow of contracts from Pentagon also provided an impetus to the stocks. With Trump strongly opposing the budget sequestration imposed by his predecessor, defense stocks are likely to gain traction in the coming days. Moreover, growing international market for weaponries with more developing nations expanding their defense spending is also likely to fuel the industry's growth.
With almost 262 companies (81 S&P 500 members) slated to report fourth-quarter results this week, let's find out where the following defense stocks stand before their earnings release on Jan 25.
Raytheon Company delivered a positive earnings surprise of 3.68% in the last quarter. The company outperformed the Zacks Consensus Estimate in the four trailing quarters, with an average beat of 6.50%.
We expect the Missile Systems business unit of the defense major to primarily drive the company’s revenues in the quarter. Missile systems contribute nearly 30% of the company’s total sales and continue to be a major growth driver. The Zacks Consensus Estimate for fourth-quarter Missile systems sales is pegged at $2,219 million, reflecting year-over-year growth of 17.1%.
Apart from its strong hold in missile defense, the company also enjoys a leading position in offering cybersecurity, particularly on the domestic front. Moreover, its overseas business sales is also expected to boost results.
Per our proven model, a stock is likely to beat earnings estimates if it has a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Raytheon Company does have the right combination.
The company has an Earnings ESP of +0.08%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Please note that 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 Missile Deals Drive Raytheon's Earnings in Q4?)
Northrop Grumman Corporation (NOC - Free Report) delivered a positive earnings surprise of 26.03% in the last quarter. The company outperformed the Zacks Consensus Estimate in the four trailing quarters, with an average beat of 17.24%.
The Aerospace Systems segment comprises almost half of Northrop Grumman’s sales and has traditionally been a primary contributor to growth. However, the segment managed to clinch very few contracts in the fourth quarter like the $445-million Air Force contract to support LAIRCM program. This is reflected in the Zacks Consensus Estimate for the segment’s fourth-quarter revenues, which stands at $2,861 million, reflecting an annual decline of 0.4%.
The lack of substantial deals could adversely impact the top-line of the company. The Zacks Consensus Estimate for sales is pegged at $6.37 billion, reflecting a 0.4% year-over-year decline.
Northrop Grumman Corporation Price and EPS Surprise
Northrop Grumman does not have the right combination for an earnings beat this season. The company’s Earnings ESP of -0.69%, when combined with its Zacks Rank #2 makes a beat unlikely this season. (Read more: Will Lack of Orders Dent Northrop Grumman's Q4 Earnings?)
L3 Technologies, Inc. delivered a positive earnings surprise of 1.03% in the last quarter. The company outperformed the Zacks Consensus Estimate in the four trailing quarters, with an average beat of 9.13%.
The company’s fourth-quarter sales expectation of $2.8-$2.9 billion also reflects 6% decline in organic growth. Probably this prediction led to a 2.9% annual decline in the Zacks Consensus Estimate for earnings of $2.31 per share.
L-3 Communications Holdings, Inc. Price and EPS Surprise
L3 Technologies does not have the right combination for an earnings beat this season. The company’s Earnings ESP of -2.04% when combined with its Zacks Rank #3 makes a beat unlikely this season. ( Read More: Can Vertex Sell-Off Aid L3 Technologies Q4 Earnings?)
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Key Predictions for Q4 Earnings Reports of RTN, NOC, LLL
The fourth-quarter earnings season is well under way with 53 S&P 500 members having reported their quarterly numbers as of Jan 19. So far, the earnings trend appears impressive with tax cuts driving the results.
Quarterly earnings of the 53 S&P members have improved 11.7% while revenues increased 7.5%. The beat ratio for the bottom line was 81.1% while that for top line was 75.5%, as of Jan 19.
Coming to the Zacks Aerospace-Defense industry , none of the stocks have reported results so far. However, considering the inherent stability of this industry, projections for the Aerospace sector (one of the 16 Zacks sector), which constitutes the Aerospace-Defense industry, hint at an impressive quarter, when compared to its third-quarter performance.
Evidently, the sector's earnings are likely to improve 6.6% on 5.7% higher revenues in the fourth quarter. Third-quarter earnings for this sector declined 6.8%. For more details on quarterly releases, you can go through our latest Earnings Preview .
Defense stocks remained on a growth trajectory in the fourth quarter, courtesy of the various defense policy initiatives adopted by President Trump. A steady flow of contracts from Pentagon also provided an impetus to the stocks. With Trump strongly opposing the budget sequestration imposed by his predecessor, defense stocks are likely to gain traction in the coming days. Moreover, growing international market for weaponries with more developing nations expanding their defense spending is also likely to fuel the industry's growth.
With almost 262 companies (81 S&P 500 members) slated to report fourth-quarter results this week, let's find out where the following defense stocks stand before their earnings release on Jan 25.
Raytheon Company delivered a positive earnings surprise of 3.68% in the last quarter. The company outperformed the Zacks Consensus Estimate in the four trailing quarters, with an average beat of 6.50%.
We expect the Missile Systems business unit of the defense major to primarily drive the company’s revenues in the quarter. Missile systems contribute nearly 30% of the company’s total sales and continue to be a major growth driver. The Zacks Consensus Estimate for fourth-quarter Missile systems sales is pegged at $2,219 million, reflecting year-over-year growth of 17.1%.
Apart from its strong hold in missile defense, the company also enjoys a leading position in offering cybersecurity, particularly on the domestic front. Moreover, its overseas business sales is also expected to boost results.
Per our proven model, a stock is likely to beat earnings estimates if it has a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Raytheon Company does have the right combination.
The company has an Earnings ESP of +0.08%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Raytheon Company Price and EPS Surprise
Raytheon Company Price and EPS Surprise | Raytheon Company Quote
Raytheon carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Please note that 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 Missile Deals Drive Raytheon's Earnings in Q4?)
Northrop Grumman Corporation (NOC - Free Report) delivered a positive earnings surprise of 26.03% in the last quarter. The company outperformed the Zacks Consensus Estimate in the four trailing quarters, with an average beat of 17.24%.
The Aerospace Systems segment comprises almost half of Northrop Grumman’s sales and has traditionally been a primary contributor to growth. However, the segment managed to clinch very few contracts in the fourth quarter like the $445-million Air Force contract to support LAIRCM program. This is reflected in the Zacks Consensus Estimate for the segment’s fourth-quarter revenues, which stands at $2,861 million, reflecting an annual decline of 0.4%.
The lack of substantial deals could adversely impact the top-line of the company. The Zacks Consensus Estimate for sales is pegged at $6.37 billion, reflecting a 0.4% year-over-year decline.
Northrop Grumman Corporation Price and EPS Surprise
Northrop Grumman Corporation Price and EPS Surprise | Northrop Grumman Corporation Quote
Northrop Grumman does not have the right combination for an earnings beat this season. The company’s Earnings ESP of -0.69%, when combined with its Zacks Rank #2 makes a beat unlikely this season. (Read more: Will Lack of Orders Dent Northrop Grumman's Q4 Earnings?)
L3 Technologies, Inc. delivered a positive earnings surprise of 1.03% in the last quarter. The company outperformed the Zacks Consensus Estimate in the four trailing quarters, with an average beat of 9.13%.
The company’s fourth-quarter sales expectation of $2.8-$2.9 billion also reflects 6% decline in organic growth. Probably this prediction led to a 2.9% annual decline in the Zacks Consensus Estimate for earnings of $2.31 per share.
L-3 Communications Holdings, Inc. Price and EPS Surprise
L-3 Communications Holdings, Inc. Price and EPS Surprise | L-3 Communications Holdings, Inc. Quote
L3 Technologies does not have the right combination for an earnings beat this season. The company’s Earnings ESP of -2.04% when combined with its Zacks Rank #3 makes a beat unlikely this season. ( Read More: Can Vertex Sell-Off Aid L3 Technologies Q4 Earnings?)
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>