The Zacks Analyst Blog Highlights: Lockheed Martin, Northrop Grumman, General Dynamics, Boeing and Raytheon

Zacks

For Immediate Release
 
Chicago, IL – July 30, 2014 – 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 Lockheed Martin Corp. (LMT-Free Report), Northrop Grumman Corp. (NOC-Free Report), General Dynamics Corp. (GD-Free Report), Boeing Company (BA-Free Report)  and Raytheon Co. (RTN-Free Report).
 
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Here are highlights from Tuesday’s Analyst Blog:

Defense Players Boost Guidance

Over the last five trading sessions, second-quarter results from the defense primes have grabbed the headlines. Although the defense contractors witnessed lower revenues in the quarter, the picture was overall reassuring with a number of earnings beats. There was also some improvement on the guidance front. Yet, most of the big defense stocks closed in the red over the last five trading sessions.

(Read the last recap here: Defense Stock Roundup for Jul 22, 2014).

Iraq Update

The U.S. has boosted its surveillance efforts and has sent more military advisers to Iraq. According to the Pentagon, 20 more military advisers recently arrived in Iraq. This brought the total U.S. military personnel there to 825.

Pentagon officials are worried about the continued threat that the extremist group poses to the security of U.S. personnel and associates. The officials insisted that the Islamic State in Iraq and Syria (ISIS) is not just a group but a "full-blown army." Simply military support will not just do to address the instability in Iraq. The creation of a new Iraqi government would be the key to reducing ISIS’ strength. The U.S. is also conducting a study of a likelihood of drone strikes in Iraq.

U.S. officials are all in favor of a new government that will reject exclusionist policies that Washington believes have stirred dissent under Prime Minister Nouri al-Maliki.

Meanwhile, the Iraqi ambassador Lukman Faily lamented that Washington was sending mixed signals to Baghdad regarding its true intentions of military support.

Pentagon’s top priorities in Iraq have been to enhance U.S. intelligence, support the formation of a new government and help Iraqi forces to hold back the ISIS.

Recap of the Week’s Most Important Stories

1. Pentagon’s prime contractor and the world’s largest defense company, Lockheed Martin Corp. (LMT-Free Report) reported a forecast-beating 4.5% rise in second-quarter 2014 earnings per share, backed by strong operational performance. The company raised its 2014 earnings guidance, reflecting lower pension costs and an improved outlook for its space unit (read more: Lockheed Martin Beats on Q2 Earnings and Sales, Boosts View).

2. Northrop Grumman Corp. (NOC-Free Report) reported higher profits in the second quarter despite missing analyst expectations. The company also raised its earnings guidance for the year, with international sales expected to reach 13% of total sales, up from 10% in 2013. The growth will likely come from unmanned aerial vehicles and cybersecurity work (read more: Northrop Grumman Misses on Q2 Earnings yet Guides Higher).

3. Pentagon’s No. 3 contractor, General Dynamics Corp. (GD-Free Report) reported better-than-expected second quarter earnings. Yet, its revenues fell 4.6% in the quarter, missing the Street expectation. The company’s aerospace division, which manufactures the commercial Gulfstream jet, experienced a sales decline of 2.8%.

Nonetheless, the company expects orders for Gulfstream jets to remain robust through the year. The company increased its overall profit outlook for the year to $7.40 to $7.45 per share from its earlier forecast of $7.05 to $7.10 per share. The company’s cost cutting initiatives spurred profitability even as defense spending by the U.S. government remained low (read more: General Dynamics Beats Q2 Earnings Estimates on Cost Control).

4. The Boeing Company (BA-Free Report) delivered upbeat second quarter 2014 results backed by robust deliveries and soaring profits (up 45% year over year). Moreover, Boeing raised its full-year 2014 earnings outlook (read more: Boeing Q2 Earnings Beat Comes on Higher Deliveries, Ups View).

5. Although the world’s largest missile manufacturer Raytheon Co. (RTN-Free Report) met the earnings consensus, its top line came above the Street estimate. Revenues nonetheless took a beating year over year in a budget-constrained U.S. defense market (read more: Raytheon Company Meets Q2 Earnings Estimates, Reaffirms View).
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