Markets
TXT

Defense Stocks' Q4 Earnings Slated for Jan 26: RTN, NOC, LLL

A pen next to a calculator.
Credit: Shutterstock photo

The Q4 earnings season in the defense sector was jumpstarted by the quarterly release of Rockwell Collins, Inc. COL on Jan 20. Yesterday, sector behemoth Lockheed Martin Corp. LMT came up with its results. Boeing Co. BA and Textron Inc. TXT are scheduled to post their fourth-quarter and full-year 2016 results today. This week, we expect to see quite a few of the major defense contractors to release their financial numbers.

As of Jan 20, 19.1% of the market cap of the S&P 500 index has reported quarterly results, revealing a 4.7% increase in earnings on 2.7% higher revenues. Overall, earnings are anticipated to record a 4.8% increase on 3.7% higher revenues, with five of the 16 Zacks sectors witnessing growth in the negative territory. The picture should become clearer by the end of this week, as a number of the index members are scheduled to report earnings results.

Only 3.2% of the Aerospace and Defense sector released their quarterly results, with 100% beating EPS estimates and none surpassing the revenue mark. Total Q4 earnings from the Aerospace and Defense sector are expected to improve 7.4% year over year on 1.4% higher revenues. For more details on quarterly releases, you can go through our Earnings Preview report.

Let's take a look at three defense companies - Raytheon Company RTN , Northrop Grumman Corporation NOC and L3 Technologies, Inc. LLL - all scheduled to release quarterly results before the opening bell on Jan 26.

Raytheon reported a positive earnings surprise of 9.15% in the last quarter. Notably, Raytheon outperformed the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 6.27%.

Our proven model shows that Raytheon is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. The company has the right combination of two key ingredients.

Raytheon has an Earnings ESP of +2.15%. That is because while the Most Accurate estimate is pegged at $1.90, the Zacks Consensus Estimate is lower at $1.86. The company currently carries a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here

Meanwhile, 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: Raytheon Company Q4 Earnings: A Beat in the Cards? )

Raytheon Company Price and EPS Surprise

Raytheon Company Price and EPS Surprise | Raytheon Company Quote

Northrop Grumman reported a positive earnings surprise of 7.47% in the last quarter. Notably, Northrop Grumman outperformed the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 8.29%.

Northrop Grumman has an Earnings ESP of +0.80%. That is because while the Most Accurate estimate is pegged at $2.51, the Zacks Consensus Estimate is lower at $2.49. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

The company has a Zacks Rank #2. Our proven model shows that Northrop Grumman is likely to beat earnings because it has the right combination of two key ingredients. (Read more: Northrop Grumman Q4 Earnings: A Beat in the Cards? )

Northrop Grumman Corporation Price and EPS Surprise

Northrop Grumman Corporation Price and EPS Surprise | Northrop Grumman Corporation Quote

L3 Technologies posted a positive earnings surprise of 3.30% in the preceding quarter. It is worth noting that the company has outperformed the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 13.65%.

The Earnings ESP for L3 Technologies is +2.36% because the Most Accurate estimate is $2.17, while the Zacks Consensus Estimate is pegged lower at $2.12. The company has a Zacks Rank #3. L-3 Technologies is likely to beat earnings because it has the right combination of two key ingredients. (Read more: L-3 Technologies Q4 Earnings: Is a Beat in Store? )

L-3 Communications Holdings, Inc. Price and EPS Surprise

L-3 Communications Holdings, Inc. Price and EPS Surprise | L-3 Communications Holdings, Inc. Quote

Stay tuned! Check later for our full write-up on earnings releases of these stocks.

Zacks' Top 10 Stocks for 2017

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?

Who wouldn't? As of early December, the 2016 Top 10 produced 5 double-digit winners including oil and natural gas giant Pioneer Natural Resources which racked up a stellar +50% gain. The new list is painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. Be among the very first to see it>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Northrop Grumman Corporation (NOC): Free Stock Analysis Report

Boeing Company (The) (BA): Free Stock Analysis Report

Lockheed Martin Corporation (LMT): Free Stock Analysis Report

Rockwell Collins, Inc. (COL): Free Stock Analysis Report

Textron Inc. (TXT): Free Stock Analysis Report

Raytheon Company (RTN): Free Stock Analysis Report

L-3 Communications Holdings, Inc. (LLL): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

TXT BA NOC LMT

Other Topics

Earnings Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More