Why Is Aerojet Rocketdyne (AJRD) Down 1% Since Last Earnings Report?

A month has gone by since the last earnings report for Aerojet Rocketdyne Holdings (AJRD). Shares have lost about 1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Aerojet Rocketdyne due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Aerojet Rocketdyne Q2 Earnings Surpass Estimates

Aerojet Rocketdyne Holdings reported second-quarter 2020 adjusted earnings of 47 cents per share, which surpassed the Zacks Consensus Estimate of 43 cents by 9.3%. However, the bottom line declined 8% year over year.

Barring one-time adjustments, the company reported GAAP earnings of 47 cents per share, reflecting a decline of 1.9% from 54 cents recorded in the prior-year quarter.

Operational Performance

Aerojet Rocketdyne’s second-quarter revenues of $512.4 million came in 5.6% higher than the year-ago quarter’s $485 million. The top line also exceeded the Zacks Consensus Estimate of $501 million by 2.3%.The increase in net sales was primarily driven by the Guided Multiple Launch Rocket System (GMLRS) and the Medium Range Ballistic Missile (MRBM) programs.

Total backlog at the end of second-quarter 2020 was $6.8 billion compared with $5.4 billion as of Dec 31, 2019. Of this, funded backlog amounted to $3.2 billion compared with $2.1 billion at 2019-end.

Total operating expenses increased 7.1% year over year to $443.4 million in the second quarter. Meanwhile, operating income of $69 million fell3% from $71.1 million a year ago.

Segmental Performance

Aerospace & Defense: Revenues at this segment improved 6% year over year to$511.9 million.

Real Estate: The segment generated revenues of $0.5 million compared with the year-ago quarter’s figure of $1.9 million.

Financial Update

Aerojet Rocketdyne exited the second quarter with cash and cash equivalents of $1,003.9 million, up from $932.6 million as of Dec 31, 2019.

Long-term debt amounted to $338.4 million as of Jun 30, 2020, down from $352.3 million as of Dec 31, 2019.

Operating cash inflow from continuing operations summed $127.6 million as of Jun 30, 2020, compared with $31.2 million in the year-ago period.

Free cash flow at the end of the first six months of 2020 was $111.4 million compared with $24.3 million a year ago.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 7.69% due to these changes.

VGM Scores

Currently, Aerojet Rocketdyne has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.


Estimates have been trending upward for the stock, and the magnitude of this revision has been net zero. Notably, Aerojet Rocketdyne has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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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.


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