Markets

Orbital ATK (OA) Beats Q3 Earnings Estimates, Guides Up

Orbital ATK, Inc.OA reported third-quarter 2015 pro forma earnings of $1.35 per share, outpacing the Zacks Consensus Estimate of $1.08 by 25% and increasing 17.4% from the comparable year-ago period. The upswing in earnings was caused by higher operating income at Space Systems Group.

As per GAAP, the company reported earnings of $1.12 per share compared with $1.29 per share in the prior-year quarter.

Total Revenue

Orbital ATK's total revenues in the third quarter 2015 were $1,135 million, beating the Zacks Consensus Estimate of $1,088 million by 4.3%. Reported revenues increased 2% from the year-ago figure of $1,112 million. The upside was primarily driven by higher revenues at Space Systems Group and lower corporate eliminations.

Segmental Update

Flight Systems Group: Segment sales decreased 11.4% to $325 million. The year-over-year downside resulted from a settlement with a supplier in the Launch Vehicles Division.

Defense Systems Group: This segment reported sales of $453 million, down 7% year over year due to lower revenues in the Small Caliber Systems Division.

Space Systems Group: This segment registered an increase of 31.9% in sales to $371 million. This upside was driven by higher revenues in the Commercial Satellite Division and the Civil and Defense Satellites Division.

Highlights of the Release

Total operating income in the reported quarter was up 11.9% to $134.9 million from $120.5 million in third-quarter 2014. Overall, operating income increased primarily due to higher operating income at Flight Systems Group and higher corporate income.

Orbital ATK incurred interest expenses of $44.7 million in the first nine months of 2015 compared with $46.2 million in the first nine months of 2014.

Capital expenditures in the quarter were $27.2 million.

Orbital ATK's firm backlog was around $8.7 billion and its total backlog was approximately $13.82 billion including options, indefinite quantity contract and undefinitized orders. The company clocked orders worth $2.81 billion in the third quarter.

Guidance

For 2015, Orbital ATK narrowed the revenue guidance range to $4,450-$4,500 million from an earlier projection of $4,425-$4,500 million.

Earnings for the same period are now projected in a band of $4.75-$4.85 per share, up from $4.60-$4.80 per share guided earlier.

Capital expenditure for 2015 is expected at around $150 million.

Upcoming Peer Releases

Curtiss-Wright Corp. CW plans to release third-quarter earnings on Oct 28, 2015. The Zacks Consensus Estimate stands at $1.01 per share.

Rockwell Collins Inc. COL is expected to report third-quarter 2015 results on Oct 30, 2015.The Zacks Consensus Estimate stands at $1.31 per share.

Kratos Defense & Security Solutions, Inc. KTOS is scheduled to report third-quarter earnings on Nov 5, 2015. The Zacks Consensus Estimate is at a loss of 2 cents per share.

Zacks Rank

Orbital ATK currently carries a Zacks Rank #4 (Sell).

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 >>

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

ORBITAL ATK INC (OA): Free Stock Analysis Report

ROCKWELL COLLIN (COL): Free Stock Analysis Report

CURTISS WRIGHT (CW): Free Stock Analysis Report

KRATOS DEFENSE (KTOS): 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

KTOS CW

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