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The Zacks Analyst Blog Highlights: Northrop Grumman, General Dynamics, L-3 Communications Holdings, Raytheon and Lockheed Martin - Press Releases

For Immediate Release

Chicago, IL - May 07, 2015 - Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Northrop Grumman Corp. ( NOC ), General Dynamics ( GD ), L-3 Communications Holdings ( LLL ), Raytheon Co. ( RTN ) and Lockheed Martin Corp. ( LMT ).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free .

Here are highlights from Wednesday's Analyst Blog:

Defense Stock Roundup: Q1 Earnings Version

In the final stretch of the Q1 earnings season, Northrop Grumman Corp. ( NOC ), General Dynamics ( GD ) and L-3 Communications Holdings ( LLL ) reported their first-quarter numbers. Although General Dynamics reported encouraging quarterly results, Northrop Grumman's and L-3 Communications Holdings' numbers were less impressive.

The Q1 earnings season has failed to cheer investors as reflected in share price losses. It was a stronger dollar as well as a tepid budget that weighed on revenue results. With 100% of the companies having already reported their first-quarter numbers, 55.6% have beaten earnings estimates while only 44.4% could surpass top-line expectations.

Apart from earnings stories, there were also a few contract awards including Raytheon Co.'s ( RTN ) big award from Missile Defense Agency for the production of Standard Missile-3 Block IBs.

(Read Defense Stock Roundup for Apr 29, 2015 here.)

Recap of the Week's Most Important Stories

1. Northrop Grumman Corp. 's first-quarter 2015 earnings missed the Street expectation and also declined 7.4% year over year. Though its quarterly earnings were weakened by pension adjustments and tighter aerospace margins, revenues were above analysts' expectations and increased year over year.

Northrop Grumman, which makes unmanned planes and electronic equipment, raised its earnings forecast for 2015 to a range of $9.40 to $9.60 from $9.20 to $9.50 (read more: Northrop Lags Q1 Earnings, Beats on Revenues ).

2. General Dynamics Corp. reported upbeat first-quarter results with top and bottom lines beating the Street mark. Revenues increased at three of the four divisions, while operating earnings edged up across the board, driven by a 47% increase in earnings at its Combat Systems division.

Total backlog jumped 26.3% year over year, while funded backlog at the end of the quarter grew 16.1% year over year. Although the company did not revise its outlook for 2015, it said that the strong U.S. dollar hurt revenues and operating earnings by about $120 million and $20 million, respectively (read more: General Dynamics Posts Upbeat Q1 Earnings, Backlog Robust ).

3. L-3 Communications Holdings Inc. posted weak first-quarter results with its earnings dropping 24.7% year over year hurt by sales decline in each of its four segments. Its quarterly results were affected by additional costs on international head-of-state aircraft modification contracts in the Platform Systems business under its Aerospace Systems segment.

The company lowered its revenue as well as earnings guidance for 2015. It now expects total revenues to be in the range of $11.45 billion to $11.65 billion for 2015, down from $11.75 billion to $11.95 billion expected earlier. Earnings are now likely to fall in between $7.17-$7.47 versus $7.35-$7.65 expected earlier. Excluding the impact of a planned divestiture of its Marine Systems business, L-3 Communications continues to project a profit of $7.35 to $7.65 a share this year.

In this context it is worth noting that though the defense giants, Lockheed Martin Corp. ( LMT ) and Northrop Grumman, have reported a decline in first-quarter profits, they've lifted their full year earnings expectations (read more: L-3 Communications Misses Earnings, Cuts Top-Line View ).

4. Raytheon Co. won a not-to-exceed $559.2 million contract for guided missiles. Last week, the Missile Defense Agency issued the undefinitized contract action under which Raytheon is to produce up to 52 more all-up rounds of its Standard Missile-3 Block. Pentagon's initial order is for 44 of the rounds, while the undefinitized contract action requires the company to upgrade the design of third stage rocket motor and enhance its reliability. As per this sole-source contract, Raytheon Missile Systems will immediately receive $401.8 million from the department using fiscal 2015 defense-wide procurement funds.

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NORTHROP GRUMMN (NOC): Free Stock Analysis Report

GENL DYNAMICS (GD): Free Stock Analysis Report

L-3 COMM HLDGS (LLL): Free Stock Analysis Report

RAYTHEON CO (RTN): Free Stock Analysis Report

LOCKHEED MARTIN (LMT): 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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