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Defense Stock Roundup: TXT, LMT, UTX Post Impressive Q3 Earnings
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Following impressive Q3 numbers, the major indices of the Aerospace-Defense space ended in the green over the trailing five trading sessions. Notably, the S&P 500 Aerospace & Defense (Industry) index rose 2%, while the Dow Jones U.S. Aerospace & Defense index gained 3% in the aforementioned time period.
In the past week, quarterly results from a number of Aerospace-Defense majors namely, Textron Inc. (TXT - Free Report) , Lockheed Martin Corp. (LMT - Free Report) , The Boeing Company (BA - Free Report) , United Technologies, Corp. , Northrop Grumman Corp. (NOC - Free Report) , and General Dynamics Corp. (GD - Free Report) and Raytheon Company drew investors’ focus.
Recap of Past Week’s Important Stories
1. Textron’s third-quarter 2019 earnings from continuing operations of 95 cents per share surpassed the Zacks Consensus Estimate by 11.8% and also increased 55.7% on a year over year basis. However, quarterly revenues of $3,259 million fell short of the Zacks Consensus Estimate by 2.7%. However, the top line rose 1.8% year over year.
The company’s cash inflow from operating activities amounted to $238 million at the end of the third quarter compared with cash inflow of $319 million at the end of the prior-year period.
2. Lockheed Martin’s third-quarter 2019 earnings of $5.66 per share surpassed the Zacks Consensus Estimate by 12.5% and improved 10.1% on a year-over-year basis. Its net sales amounted to $15.17 billion, which outshined the Zacks Consensus Estimate by 1.3% and increased 6% year over year.
Lockheed Martin ended the third quarter (on Sep 29, 2019) with $137.4 billion in backlog, up 0.5% from $136.7 billion at the end of second-quarter 2019.
The company’s cash from operations at the end of third-quarter 2019 amounted to $5.82 billion compared with $0.92 billion a year ago. For 2019, Lockheed Martin partially raised its financial guidance (read more: Lockheed Martin Beats on Q3 Earnings, Ups '19 EPS View).
3. Boeing’s adjusted earnings of $1.45 per share for third-quarter 2019 missed the Zacks Consensus Estimate by 28.9% and also declined 59% on a year-over-year basis. Its revenues amounted to $19.98 billion, which surpassed the Zacks Consensus Estimate by 3.3%. The top line however plunged 21% year over year.
The company’s backlog at the end of third-quarter 2019 slipped to $470 billion from $474 billion at the end of second-quarter 2019.
4. United Technologies’ third-quarter 2019 adjusted earnings of $2.21 per share surpassed the Zacks Consensus Estimate of $2.03. The bottom line was also higher than the year-ago figure of $1.93. Its revenues came in at $19,496 million, up 18.1% year over year. The top line also outpaced the consensus estimate of $19,313 million.
During the reported quarter, the company generated $2,490 million cash from operating activities compared with $1,762 million reported a year ago.
5. Northrop Grumman’s third-quarter 2019 earnings of $5.49 per share surpassed the Zacks Consensus Estimate by 15.8%. However, the bottom line declined 22.8% on a year over year basis. Its total sales of $8,475 million missed the Zacks Consensus Estimate by 0.83%. However, sales grew 4.8% year over year.
The company’s total backlog at the end of third-quarter 2019 was $65 billion.
6. General Dynamics’ third-quarter 2019 earnings from continuing operations of $3.14 per share beat the Zacks Consensus Estimate by 2.6% and also improved 10.2% year over year. Its third-quarter revenues of $9,761 million surpassed the Zacks Consensus Estimate by 0.82% and grew 7.3% on a year-over-year basis.
The company’s total backlog at the end of third-quarter 2019 was $67.4 billion.
In the first nine months of 2019, the company’s cash provided by operating activities was $587 million compared with $1,081 million in the year-ago period (read more: General Dynamics' Q3 Earnings Beat, Revenues Rise Y/Y).
7. Raytheon’s third-quarter 2019 earnings per share of $3.08 from continuing operations surpassed the Zacks Consensus Estimate by 8.1% and improved a solid 36.9% on a year-over-year basis. Its third-quarter sales of $7,446 million increased 9.4% year over year and exceeded the Zacks Consensus Estimate by 2.6%.
The company’s bookings totaled $9,439 million compared with $8,710 million in the year-ago quarter, reflecting an improvement of 8.4%.
Cash flow from operating activities amounted to $1,690 million at the end of third-quarter 2019 compared with $995 million at the end of third-quarter 2018. Raytheon partially raised its financial guidance for 2019 (read more: Raytheon Q3 Earnings Top, Improve Y/Y, EPS View Up).
Performance
Over the past five trading sessions, the defense biggies put up a mixed show. While Raytheon gained the most with 5.8% increase in share price, Boeing lost 6.6%.
Over the last six months as well, the industry's performance has been mixed. Northrop has gained the most with 27.5% rise in share price, while Textron lost 13.8%.
The following table shows the price movement of the major defense players over the past five trading days and during the last six months.
Company
Last Week
Last 6 Months
LMT
0.62%
13.52%
BA
-6.64%
-8.23%
GD
-1.18%
-3.35%
RN
5.82%
13.89%
NOC
2.07%
27.47%
LDOS
-2.04%
20.31%
TXT
-2.09%
-13.79%
LHX
1.57%
22.65%
What’s Next?
Leidos Holdings is set to release its third-quarter 2019 results on Oct 29.
L3Harris Technologies is scheduled to announce its third-quarter 2019 numbers on Oct 30.
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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >>
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Defense Stock Roundup: TXT, LMT, UTX Post Impressive Q3 Earnings
Following impressive Q3 numbers, the major indices of the Aerospace-Defense space ended in the green over the trailing five trading sessions. Notably, the S&P 500 Aerospace & Defense (Industry) index rose 2%, while the Dow Jones U.S. Aerospace & Defense index gained 3% in the aforementioned time period.
In the past week, quarterly results from a number of Aerospace-Defense majors namely, Textron Inc. (TXT - Free Report) , Lockheed Martin Corp. (LMT - Free Report) , The Boeing Company (BA - Free Report) , United Technologies, Corp. , Northrop Grumman Corp. (NOC - Free Report) , and General Dynamics Corp. (GD - Free Report) and Raytheon Company drew investors’ focus.
Recap of Past Week’s Important Stories
1. Textron’s third-quarter 2019 earnings from continuing operations of 95 cents per share surpassed the Zacks Consensus Estimate by 11.8% and also increased 55.7% on a year over year basis. However, quarterly revenues of $3,259 million fell short of the Zacks Consensus Estimate by 2.7%. However, the top line rose 1.8% year over year.
The company’s cash inflow from operating activities amounted to $238 million at the end of the third quarter compared with cash inflow of $319 million at the end of the prior-year period.
Textron slashed its guidance for 2019 (read more: Textron's Q3 Earnings Beat Estimates, Revenues Miss).
2. Lockheed Martin’s third-quarter 2019 earnings of $5.66 per share surpassed the Zacks Consensus Estimate by 12.5% and improved 10.1% on a year-over-year basis. Its net sales amounted to $15.17 billion, which outshined the Zacks Consensus Estimate by 1.3% and increased 6% year over year.
Lockheed Martin ended the third quarter (on Sep 29, 2019) with $137.4 billion in backlog, up 0.5% from $136.7 billion at the end of second-quarter 2019.
The company’s cash from operations at the end of third-quarter 2019 amounted to $5.82 billion compared with $0.92 billion a year ago. For 2019, Lockheed Martin partially raised its financial guidance (read more: Lockheed Martin Beats on Q3 Earnings, Ups '19 EPS View).
3. Boeing’s adjusted earnings of $1.45 per share for third-quarter 2019 missed the Zacks Consensus Estimate by 28.9% and also declined 59% on a year-over-year basis. Its revenues amounted to $19.98 billion, which surpassed the Zacks Consensus Estimate by 3.3%. The top line however plunged 21% year over year.
The company’s backlog at the end of third-quarter 2019 slipped to $470 billion from $474 billion at the end of second-quarter 2019.
Boeing’s operating cash outflow at the end of the third quarter was $0.26 billion against cash inflow of $12.38 billion at the end of third quarter of 2018 (read more: Boeing Q3 Earnings Miss, Down Y/Y on Lower 737 Deliveries).
4. United Technologies’ third-quarter 2019 adjusted earnings of $2.21 per share surpassed the Zacks Consensus Estimate of $2.03. The bottom line was also higher than the year-ago figure of $1.93. Its revenues came in at $19,496 million, up 18.1% year over year. The top line also outpaced the consensus estimate of $19,313 million.
During the reported quarter, the company generated $2,490 million cash from operating activities compared with $1,762 million reported a year ago.
The company revised 2019 earnings guidance to $8.05-$8.15 per share from $7.90-$8.05 projected earlier (read more: United Technologies Q3 Earnings & Revenues Top, Up Y/Y).
5. Northrop Grumman’s third-quarter 2019 earnings of $5.49 per share surpassed the Zacks Consensus Estimate by 15.8%. However, the bottom line declined 22.8% on a year over year basis. Its total sales of $8,475 million missed the Zacks Consensus Estimate by 0.83%. However, sales grew 4.8% year over year.
The company’s total backlog at the end of third-quarter 2019 was $65 billion.
Its net cash inflow from operating activities as of Sep 30, 2019 was $1,833 million compared with $1,450 million as of Sep 30, 2018 (read more: Northrop Grumman Beats on Q3 Earnings, Ups '19 EPS View).
6. General Dynamics’ third-quarter 2019 earnings from continuing operations of $3.14 per share beat the Zacks Consensus Estimate by 2.6% and also improved 10.2% year over year. Its third-quarter revenues of $9,761 million surpassed the Zacks Consensus Estimate by 0.82% and grew 7.3% on a year-over-year basis.
The company’s total backlog at the end of third-quarter 2019 was $67.4 billion.
In the first nine months of 2019, the company’s cash provided by operating activities was $587 million compared with $1,081 million in the year-ago period (read more: General Dynamics' Q3 Earnings Beat, Revenues Rise Y/Y).
7. Raytheon’s third-quarter 2019 earnings per share of $3.08 from continuing operations surpassed the Zacks Consensus Estimate by 8.1% and improved a solid 36.9% on a year-over-year basis. Its third-quarter sales of $7,446 million increased 9.4% year over year and exceeded the Zacks Consensus Estimate by 2.6%.
The company’s bookings totaled $9,439 million compared with $8,710 million in the year-ago quarter, reflecting an improvement of 8.4%.
Cash flow from operating activities amounted to $1,690 million at the end of third-quarter 2019 compared with $995 million at the end of third-quarter 2018. Raytheon partially raised its financial guidance for 2019 (read more: Raytheon Q3 Earnings Top, Improve Y/Y, EPS View Up).
Performance
Over the past five trading sessions, the defense biggies put up a mixed show. While Raytheon gained the most with 5.8% increase in share price, Boeing lost 6.6%.
Over the last six months as well, the industry's performance has been mixed. Northrop has gained the most with 27.5% rise in share price, while Textron lost 13.8%.
The following table shows the price movement of the major defense players over the past five trading days and during the last six months.
What’s Next?
Leidos Holdings is set to release its third-quarter 2019 results on Oct 29.
L3Harris Technologies is scheduled to announce its third-quarter 2019 numbers on Oct 30.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>