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Aerospace Stocks to Watch for Earnings on Jan 27: TDY, TXT & NOC

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·4 min read
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So far, only a couple of S&P 500 companies from the Aerospace sector have released their fourth-quarter results, both of them with better-than-expected earnings. Another of cohort of major aerospace stocks like Teledyne Technologies TDY, Textron Inc. TXT and Northrop Grumman NOC are set to announce their earnings on Jan 27.

Factors That Influenced Aerospace Stocks

A slow but steady recovery in global air travel is expected to have boosted the quarterly results of the aerospace stocks in the fourth quarter. Boeing BA witnessed a solid year-over-year surge of 67.8% in its commercial shipment during the said period. With Boeing being the largest jet maker in the nation, we expect Q4 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 in Aerospace.

On the other hand, aerospace stocks that are more focused on combat must have also 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 Q4 revenues of aerospace stocks.

However, persistent headwinds like supply chain disruption along with the slow pace of cash inflow within the industry might adversely impact the overall Q4 results of some of the aerospace companies.

Considering the aforementioned factors, we remain mostly optimistic about the overall Q4 performance of the Aerospace sector, which includes defense stocks.

Q4 Projections

Aerospace sector Q4 earnings are expected to significantly improve when compared to the prior-year quarter’s reported figure, while revenues are projected to be up 3.7%.

For more details on quarterly releases, you can go through the latest Earnings Preview.

Defense Earnings to Watch on Jan 27

Let's take a look at the following aerospace companies that are scheduled to report fourth-quarter 2021 earnings on Jan 27 and find out how things have shaped up prior to the announcements.

Teledyne Technologies: Growth expectations from the majority of its segments make Teledyne optimistic about its overall revenue performance in the fourth quarter. From the cost perspective, TDY has eliminated certain corporate overhead consultants and other fourth-party service providers, which will result in annualized cost savings of $80 million by 2022.

This, along with strong operational performance, is likely to have favorably contributed to the bottom line of the company (read more: Will Strong Sales Volume Aid Teledyne's Q4 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.

Teledyne has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Teledyne Technologies Incorporated Price and EPS Surprise

Teledyne Technologies Incorporated Price and EPS Surprise
Teledyne Technologies Incorporated Price and EPS Surprise

Teledyne Technologies Incorporated price-eps-surprise | Teledyne Technologies Incorporated Quote

Textron: The company’s aviation segment is slowly ramping up, driven by strong demand in commercial aerospace. Thus, one may expect the company to have witnessed strong deliveries for Citation jets and commercial turboprops in the fourth quarter, which must have boosted the segment’s revenues.

However, with the majority of Textron’s segments projected to report an unfavorable top line, we remain skeptical about the overall revenue outlook of the company in the soon-to-be-reported quarter.

Textron expects to incur additional contract termination costs and other charges in the range of $5-$10 million in the industrial segment. This might have weighed on the bottom line of TXN in the soon-to-be-reported quarter.

Textron currently has an Earnings ESP of -7.28% and Zacks Rank #3 (read more: Will Supply-Chain Issues Hurt Textron's Q4 Earnings?).

Textron Inc. Price and EPS Surprise

Textron Inc. Price and EPS Surprise
Textron Inc. Price and EPS Surprise

Textron Inc. price-eps-surprise | Textron Inc. Quote

Northrop Grumman: With the majority of Northrop’s segments anticipated to report lower sales, we remain skeptical about the company’s top line in the soon-to-be-reported quarter.

Northrop expects its earnings to benefit from corporate unallocated and pension adjustments, which might have added impetus to its bottom line in the soon-to-be-reported quarter. However, supply-chain challenges, labor shortages and increasing inflation are some of the factors that might have had an adverse impact on the fourth-quarter bottom line of NOC.

Northrop currently has an Earnings ESP of +1.01% and Zacks Rank #4 (Sell) (read more: Will Poor Segmental Performance Hurt Northrop Q4 Earnings?).

Northrop Grumman Corporation Price and EPS Surprise

Northrop Grumman Corporation Price and EPS Surprise
Northrop Grumman Corporation Price and EPS Surprise

Northrop Grumman Corporation price-eps-surprise | Northrop Grumman Corporation Quote

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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The Boeing Company (BA) : Free Stock Analysis Report

Northrop Grumman Corporation (NOC) : Free Stock Analysis Report

Textron Inc. (TXT) : Free Stock Analysis Report

Teledyne Technologies Incorporated (TDY) : Free Stock Analysis Report

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