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Aerojet Rocketdyne (AJRD) Q3 Earnings Miss, Revenues Down Y/Y

Zacks Equity Research

Aerojet Rocketdyne Holdings, Inc AJRD reported third-quarter 2019 adjusted earnings of 35 cents per share, which missed the Zacks Consensus Estimate of 46 cents by 23.9%. The bottom line also slumped 60.3% from 88 cents in the year-ago quarter.

Barring one-time adjustments, the company reported GAAP earnings of 39 cents per share, reflecting a decline of 52.4% from 82 cents in the prior-year quarter. This decrease can be attributed to declining sales and lower operating income in the quarter under review.

Operational Performance

Aerojet Rocketdyne’s third-quarter revenues of $481.8 million declined 3.4% from the year-ago quarter’s $498.8 million. The top line also missed the Zacks Consensus Estimate of $505 million by 4.6%.

Total backlog at the end of third-quarter 2019 was $4.5 billion compared with $4.1 billion as of Dec 31, 2018. Of this, funded backlog amounted to $2.1 billion compared with $1.8 billion at 2018-end.

Total operating expenses grew 9.3% year over year to $426.7 million in the third quarter. Meanwhile, operating income of $55.1 million plunged 49.1% from $108.3 million a year ago.

Segmental Performance

Aerospace & Defense: Revenues at this segment declined 3.5% year over year at $480 million. This can be primarily attributed to a decrease of $27.9 million in space programs, particularly the RS-68 program.

Meanwhile, the segment’s margin contracted 820 basis points (bps) to 13.5%.

Real Estate: The segment generated revenues of $1.8 million compared with the year-ago quarter’s $1.6 million.

Aerojet Rocketdyne Holdings, Inc. Price, Consensus and EPS Surprise

Aerojet Rocketdyne Holdings, Inc. Price, Consensus and EPS Surprise

Aerojet Rocketdyne Holdings, Inc. price-consensus-eps-surprise-chart | Aerojet Rocketdyne Holdings, Inc. Quote

Financial Update

Aerojet Rocketdyne exited the third quarter with cash and cash equivalents of $797 million, up from $735.3 million as of Dec 31, 2018.

Long-term debt amounted to $359.2 million as of Sep 30, 2019, up from $352.3 million as of Dec 31, 2018.

Net cash provided by operating activities amounted to $96.4 million as of Sep 30, 2019, compared with $97 million in the year-ago period.

Free cash flow at the end of the first nine months of 2019 was $80.1 million compared with $76.1 million in the same period last year.

Zacks Rank

Aerojet Rocketdyne has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Lockheed Martin Corp LMT reported third-quarter 2019 earnings of $5.66 per share, which surpassed the Zacks Consensus Estimate of $5.03 by 12.5%. The bottom line also improved 10.1% from $5.14 in the year-ago quarter.

Textron Inc TXT reported third-quarter 2019 earnings from continuing operations of 95 cents per share, which surpassed the Zacks Consensus Estimate of 85 cents by 11.8%. The bottom line surged 55.7% from the year-ago quarter.

General Dynamics Corporation GD reported third-quarter 2019 earnings from continuing operations of $3.14 per share, which beat the Zacks Consensus Estimate of $3.06 by 2.6%. The bottom line also improved 10.2% from the prior-year quarter’s $2.85.

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