Aerospace & Defense Q2 Earnings Due on Jul 27: BA, GD & TDY
The second-quarter 2022 earnings cycle has started for aerospace and defense stocks, with Lockheed Martin reporting better-than-expected earnings. Some major industry players like Boeing BA, General Dynamics GD and Teledyne Technologies TDY are set to reveal their Q2 numbers tomorrow.
Factors that Influenced Aerospace & Defense Stocks
The continuous recovery in global air travel, both domestic and international, over the past few quarters is expected to boost the Q2 results of the aerospace and defense stocks, particularly those engaged in commercial aviation. Evidently, Boeing witnessed a solid year-over-year surge of 53.2% in its commercial shipments during the second quarter. With Boeing being the largest jet maker in the nation, we expect the Q2 results of the remaining aerospace majors to reflect a similar improvement in delivery trends. Such solid deliveries must have boosted the overall top-line growth of the Aerospace sector, which houses all aerospace and defense stocks.
On the other hand, stocks in this industry that are more focused on combat must have gained as a result of steady government support. Moreover, a steady order flow observed in the past couple of quarters, along with improved deliveries in recent times, buoyed by recovering economic trends are projected to have bolstered Q2 revenues of aerospace and defense stocks.
However, persistent headwinds like supply chain disruption along with some unfavorable project timing as the result of coronavirus might have an adverse impact on the overall Q2 results of some of the industry majors.
Aerospace sector Q2 earnings are expected to decline 7.9% from the prior-year quarter’s reported figure, while revenues are projected to inch up 0.4%.
For more details on quarterly releases, you can go through the latest Earnings Preview.
Aerospace & Defense Stocks to Watch
Let's take a look at three defense companies that are scheduled to report second-quarter 2022 earnings on Jul 27 and find out how things have shaped up prior to the announcements.
Boeing’s second-quarter deliveries reflected a solid 53.2% surge in commercial shipments from the year-ago reported figure, while defense deliveries declined 7%. Such mixed delivery numbers from manufacturing companies like Boeing are likely to contribute moderately to the jet maker’s overall second-quarter results.
Improvement in aftermarket commercial jet services is expected to have bolstered the top-line performance of the company’s global services unit. However, supply chain constraints might have had some adverse impact on the company’s bottom line (read more: Will Mixed Product Deliveries Aid Boeing in Q2 Earnings?).
According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
Boeing currently has an Earnings ESP of -62.40% and a Zacks Rank #3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The Boeing Company Price and EPS Surprise
The Boeing Company price-eps-surprise | The Boeing Company Quote
General Dynamics’ Q2 results are expected to reflect solid performance of most of its segments. While increased air travel is projected to have boosted its Aerospace unit’s performance, solid construction and repair volumes for ships are expected to have benefited the Marine Systems segment. On the other hand, lower demand is anticipated to have hurt Combat Systems, while supply-chain shortages and delays in customer order activity might have hurt the performance of the Technologies segment.
Increased corporate expense and the accelerated equity compensation plan are likely to have partially impacted General Dynamics’ soon-to-be-reported quarterly earnings.
General Dynamics has an Earnings ESP of -0.37% and a Zacks Rank #3 (read more: Will Solid Segment Sales Aid General Dynamics Q2 Earnings?).
General Dynamics Corporation Price and EPS Surprise
General Dynamics Corporation price-eps-surprise | General Dynamics Corporation Quote
Teledyne’s Q2 results are likely to reflect solid segmental performance from the majority of its business units. While higher sales of electronic tests and measurement instrumentation as well as marine instrumentation are projected to have boosted the top line of the Instrumentation segment, the FLIR acquisition must have bolstered the Digital Imaging unit’s revenues. Also, gradual recovery in the commercial aerospace industry must have benefited Engineered Systems’ performance.
Nevertheless, the impact of inflation and supply-chain constraints are likely to have an adverse impact on TDY’s soon-to-be-reported quarter’s results.
Teledyne currently has an Earnings ESP of -1.20% and a Zacks Rank #3 (read more: Will Strong Segment Sales Boost Teledyne's Q2 Earnings?)
Teledyne Technologies Incorporated Price and EPS Surprise
Teledyne Technologies Incorporated price-eps-surprise | Teledyne Technologies Incorporated Quote
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