The Zacks Analyst Blog Highlights: Boeing, L-3 Communications Holdings, Northrop Grumman, Huntington Ingalls Industries and General Dynamics - Press Releases
For Immediate Release
Chicago, IL – February 04, 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 Boeing Co. (BA-Free Report), L-3 Communications Holdings Inc. (LLL-Free Report), Northrop Grumman Corp. (NOC-Free Report), Huntington Ingalls Industries, Inc. (HII-Free Report) and General Dynamics Corp. (GD-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Tuesday’s Analyst Blog:
Defense Stock Roundup
Q4 earnings releases of the major defense companies have grabbed some of the limelight with defense behemoth The Boeing Co. (BA-Free Report) delivering stellar fourth-quarter 2014 results on booming deliveries. Other major defense players also topped Street expectations with continued growth in earnings and operating margins. Revenues were also strong for most of these players barring L-3 Communications Holdings Inc. (LLL-Free Report) and Northrop Grumman Corp. (NOC-Free Report).
Defense contractor Huntington Ingalls Industries, Inc. (HII-Free Report) acquired the Engineering Solutions Division (“ESD”) of the Columbia Group, thereby consolidating its position in the market. Boeing and General Dynamics Corp. (GD-Free Report) have also managed to win some big ticket programs from the Pentagon’s funding list.
The share price movement, however, reflected little of these developments. That said, investors should be happy about Boeing’s shares appreciating almost 22% in the last six-month time frame given its bearish run last year.
(Read Defense Stock Roundup for Jan 28, 2015 for a recap.)
Budget Update
President Obama’s fiscal 2016 budget proposal, unveiled on Feb 2, 2015, called for $3.99 trillion in spending for the fiscal year beginning Oct 1. This is a 6.4% increase from the current year budget. Of this, the Obama administration wants $534.3 billion to be allocated for the base budget of the Department of Defense, about $36 billion more than what sequestration would allow and over the FY2015 enacted budget of $496.1 billion.
The budget also calls for $50.9 billion in overseas contingency operations or OCO funding, including $5.3 billion to fight Islamic State extremists.
Recap of the Week’s Most Important Stories
1. Boeing delivered stellar fourth-quarter 2014 results on booming commercial deliveries. It reported forecast beating earnings in the fourth quarter that also rose an impressive 22.9% year over year. The company expects to deliver between 750 and 755 commercial jetliners in 2015, a target that could put it on course to beat its European rival Airbus Group NV for the fourth consecutive year.
On the flip side, the company stated that manufacturing costs for its advanced 787 Dreamliners will likely increase faster than expected. It expects to post core earnings, excluding the part of its pension expenses driven by market volatility, of $8.20 to $8.40 per share for 2015, compared with $8.60 per share reported in 2014 (read more: Boeing Q4 Deliveries Ensure a Resounding Earnings Beat).
Apart from its robust fourth quarter earnings, Boeing secured a $222.7 million fixed-price-incentive, requirements-type contract for performance based support of consumable items used across various platforms. The contract, with a five-year base period, has one five-year option period.
2. General Dynamics’ fourth-quarter 2014 earnings from continuing operations comfortably surpassed the Zacks Consensus Estimate by 4.3% and increased 24.4% year over year buoyed by higher operating margins. Total backlog at the end of the fourth quarter was up 57.8% year over year to $72.4 billion, primarily led by Combat Systems and Marine Systems (read more: General Dynamics Posts Upbeat Q4 Earnings, Backlog Robust).
Meanwhile, the U.S. Department of the Army awarded a contract valued at $301.6 million to General Dynamics and Medico Industries, Wilkes-Barre Township. This contract provides for manufacturing, assemblage, inspection, packaging and delivery of 155mm artillery M795 metal parts assemblies. The M795 is designed to be a more lethal, longer range version of the M107.
3. L-3 Communications Holdings came up with forecast-beating earnings in the fourth quarter. Earnings in the reported quarter were also higher than the year-ago figure by 11.3%. However, its quarterly revenues suffered from weak U.S. government spending on defense, declining 0.8% year over year (read more: L-3 Communications Beats on Q4 Earnings, Revenues).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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