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Defense Stock Roundup: TGI Beats on Q3 Earnings, LHX Hikes Dividend

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·4 min read
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In the past five trading sessions, we witnessed some encouraging news from the defense space that must have had a favorable impact on the share performance of the defense stocks. Moreover, the broader market also remained favorable buoyed by progressive distribution of vaccine along with declining coronavirus cases across the globe. This also had a favorable impact on the overall performance of the defense stocks.

Major indices of the defense space, namely the S&P 500 Aerospace & Defense (Industry) index  and the Dow Jones U.S. Aerospace & Defense index rose 3% and 0.71%, respectively in the trailing five trading sessions.

In the past week, Triumph Group TGI reported its quarterly results, while Northrop Grumman NOC announced a new share repurchase agreement. On the other hand, L3Harris Technologies LHX increased its dividend, while Raytheon Technologies RTX won a notable contract from Pentagon.

Recap of Past Week’s Important Stories

1.    Triumph Group’s adjusted earnings in third-quarter fiscal 2021 (ended Dec 31, 2020) were 9 cents per share, which beat the Zacks Consensus Estimate. The bottom line however declined 87% from the prior-year quarter. Its net sales of $426 million missed the Zacks Consensus Estimate by 4.2% and declined 39.5% on a year-over-year basis.  

In third-quarter fiscal 2021, the company generated adjusted operating income of $37.1 million, which declined 40.5% from the year-ago quarter’s figure.

Net cash used in operating activities in the first nine months of fiscal 2021 was $195.9 million against net cash generated worth $39.3 million a year ago (read more: Triumph Group Q3 Earnings Top Estimates, Sales Fall Y/Y).

2.    Northrop Grumman revealed that it has signed an accelerated share repurchase (ASR) agreement with Goldman Sachs & Co. LLC, a subsidiary of The Goldman Sachs Group, Inc. (GS)  for $2 billion of Northrop’s common stock.

The final number of shares to be repurchased will be based on Northrop Grumman’s volume-weighted average price during the term of the transaction, which is expected to be completed in the second quarter of 2021 (read more: Northrop Announces $2B Accelerated Share Repurchase Agreement).

3.    L3Harris Technologies’ board of directors declared a cash dividend on its common stock of $1.02 per share for the first quarter of 2021. This reflects a 20% hike from the prior payout of 85 cents per share.

Post the issuance of the new rate, the annualized dividend now stands at $4.08 per share (read more: L3Harris Announces Quarterly Dividend Increase of 20%).

4.    Raytheon Technologies’ business segment, Pratt and Whitney secured a contract worth $291 million involving the supply of propulsion system for Lockheed’s (LMT) F-35 jet program. The deal has been awarded by the Naval Air Systems Command, Patuxent River, MD..

Per the terms, Pratt and Whitney will offer material and support equipment for depot maintenance facilities, program administrative labor for non-recurring sustainment activities, mockup engines and modules for test cells to support F-35’s propulsion system (read more: Raytheon's Arm Wins $291M Deal to Support F-35 Program).


Over the past five trading sessions, the defense biggies put up a solid show, except Northrop Grumman. Textron gained the most, with its shares up 8.4% followed by L3Harris.

In the last six months, the industry participants’ performance was mixed. While Boeing BA gained the most with 24.7% rally in share price, Lockheed lost 12.4%.

The following table shows the price movement of the major defense players over the past five trading days and during the last six months.


Past Week

Last 6 Months























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Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
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