Defense Stock Roundup: LMT, HON & UTX Beat Q3 Earnings; Rockwell To Buy B/E Aerospace

Third-quarter earnings releases from the defense and aerospace space have been dominating headlines over the past five trading sessions. With most of the defense primes comfortably surpassing analysts’ estimates, major indices for the aerospace and defense sector ended in the green. While the S&P 500 Aerospace & Defense (Industry) Index rallied 2.66%, the Dow Jones U.S. Aerospace & Defense Index gained 2.12% last week.

The outlook for the aerospace and defense sector is also encouraging when compared to what we saw in Q2. Earnings for this sector are likely to be down 1.3% on 3.1% lower revenues, with decline projected for seven of the 16 Zacks sectors. When compared to the Q2 scorecard, companies witnessed 11.6% earnings decline on 8.9% lower revenues.

Among last week’s highlights, defense biggies Lockheed Martin Corp. (LMT - Analyst Report) , Honeywell International Inc. (HON - Analyst Report) , Rockwell Collins Inc. (COL - Analyst Report) and United Technologies Corporation (UTX - Analyst Report) came up with earnings beats while Textron Inc. (TXT - Analyst Report) lagged expectations. Further, B/E Aerospace Inc.’s (BEAV - Snapshot Report) proposed buyout by Rockwell hogged the limelight.

(Read more: Defense Stock Roundup for Oct 20, 2016 here.)

Recap of the Week’s Most Important Stories

1. Diversified U.S. conglomerate Textron kick started the third-quarter 2016 earnings season for the aerospace and defense sector.

Both earnings from continuing operations and revenues missed the Zacks Consensus Estimate.Earnings were also down 3.2% year over year. On a brighter note, revenues increased 2.2% on account of higher contribution from Textron Aviation and Industrial. The company’s Bell segment continued its dismal performance, posting a 2.9% revenue decline.

Textron raised its 2016 earnings per share (EPS) guidance to the range of $2.65–$2.85 from the prior projection of $2.60–$2.80 (read more: Textron Misses on Q3 Earnings & Revenues, Ups View).

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Chee Hin Teh 5 years ago Member's comment

Thanks for sharing