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Aerojet Rocketdyne (AJRD) Q4 Earnings Down Y/Y, Sales Up

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Aerojet Rocketdyne Holdings, Inc. reported fourth-quarter 2019 adjusted earnings of 27 cents per share, which declined 18.2% from 33 cents in the year-ago quarter.

The Zacks Consensus Estimate for earnings was pegged at 46 cents per share.

Including one-time adjustments, the company reported GAAP earnings of 30 cents per share, reflecting a rise of 3.4% from 29 cents in the prior-year quarter. This upside can be attributed to improved year-over-year sales in the quarter under review.

For 2019, the company reported earnings of $1.56 per share, which came in 19.2% lower than the prior-year figure of $1.93.

Operational Performance

Aerojet Rocketdyne’s fourth-quarter sales of $523 million increased 19.4% from the year-ago quarter figure of $437.9 million. The top line also surpassed the Zacks Consensus Estimate of $504 million by 3.8%.

For 2019, the company recorded sales of $1.98 billion, which beat the Zacks Consensus Estimate of $1.96 billion by 1%. The full-year top line improved 4.5% from $1.90 billion recorded in the year-ago period.

Total backlog at the end of 2019 was $5.4 billion compared with $4.1 billion as of Dec 31, 2018. Of this, funded backlog amounted to $2.1 billion compared with $1.9 billion at 2018-end. The upside in backlog was driven by large multi-year awards on the Standard Missile and THAAD programs.

Total operating expenses grew 23.8% year over year to $474.3 million in the fourth quarter. Operating income of $48.7 million declined 11% from $54.7 million a year ago.

Segmental Performance

Aerospace & Defense: Revenues at this segment improved 19.8% year over year to $520.9 million. This can be primarily attributed to an increase in defense programs including the Patriot Advanced Capability-3, Guided Multiple Launch Rocket System and hypersonic booster programs. Also, an increase in space programs driven by growth in the RS-25 program contributed to this segment’s sales growth.

Real Estate: The segment generated revenues of $2.1 million compared with the year-ago quarter’s $3 million.

Financial Update

Aerojet Rocketdyne exited 2019 with cash and cash equivalents of $932.6 million, up from $735.3 million as of Dec 31, 2018.

Long-term debt amounted to $352.3 million as of Dec 31, 2019, same as of Dec 31, 2018.

Net cash provided by operating activities amounted to $261.2 million as of Dec 31, 2019, compared with $252.7 million in the year-ago period.

Free cash flow at the end of 2019 was $218.3 million compared with $209.5 million at the end of 2018.

Zacks Rank

Aerojet Rocketdyne currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Release

Huntington Ingalls Industries (HII - Free Report) fourth-quarter 2019 earnings of $4.36 per share surpassed the Zacks Consensus Estimate of $4.24 by 2.83%. However, the reported figure declined 11.7% from $4.94 reported a year ago.

Teledyne Technologies (TDY - Free Report) reported fourth-quarter 2019 adjusted earnings of $2.90 per share, which surpassed the Zacks Consensus Estimate of $2.76 by 5.1%. The bottom-line figure came above the guided range of $2.71-$2.76.

Lockheed Martin (LMT - Free Report) reported fourth-quarter 2019 earnings of $5.29 per share, which surpassed the Zacks Consensus Estimate of $4.99 by 6%. The bottom line also improved 20.5% from $4.39 in the year-ago quarter.

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