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L3 Technologies (LLL) Q3 Earnings: What's in the Cards?

L3 Technologies, Inc.LLL is scheduled to release third-quarter 2017 results on Oct 26, before the opening bell.

Last quarter, the company delivered a positive earnings surprise of 8.87%. Moreover, it surpassed the Zacks Consensus Estimate in all the trailing four quarters, with an average beat of 9.70%.

Let's see how things are shaping up at the company prior to this announcement.

Factors at Play

L3 Technologies expects sales of roughly $2.7 billion in the to-be-reported quarter, which reflects about a 6% organic growth. While operating margin is anticipated to lie in the mid-9% range, earnings per share is projected to be between $1.85 and $1.95. Again, free cash flow is forecasted in the range of $150 million to $200 million.

However, the company expects Aerospace Systems segment to decline in the third quarter compared with the first half of 2017. This is primarily due to certain contract price modifications at Vertex sliding into the fourth quarter of 2016, and sales mix in Intelligence, Surveillance & Reconnaissance (ISR) as well as aircraft systems.

While the Zacks Consensus Estimate for earnings reflects 3.12% year-over-year growth, the same for revenues is pegged at $2.69 billion, implying a 7.40% year-over-year improvement.

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

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

Earnings Whispers

Our proven model does not conclusively show that L3 Technologies will 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. This is not the case here, as you will see below.

Zacks ESP: L3 Technologies has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.94. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: L3 Technologies carries a Zacks Rank #4 (Sell).

We caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks that Warrant a Look

Here are a few stocks in the Aerospace and Defense space worth considering on the basis of our model which shows that they have the right combination to pull off a beat:

General Dynamics Corp. GD is slated to report quarterly results on Oct 25. The company has an Earnings ESP of +0.37% and a Zacks Rank #3.

Leidos Holdings, Inc. LDOS to report quarterly results on Nov 2. The company has an Earnings ESP of +3.75% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here.

Huntington Ingalls Industries, Inc. HII is slated to report quarterly results on Nov 8. The company has an Earnings ESP of +2.04% and a Zacks Rank #2.

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

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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.

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