U.S. Markets close in 4 hrs 50 mins

Maxar (MAXR) to Report Q4 Earnings: What's in the Offing?

Zacks Equity Research

Maxar Technologies Inc. MAXR is scheduled to report fourth-quarter 2019 results on Mar 2, after the closing bell. In the last reported quarter, the company delivered a negative earnings surprise of 10%, missing the Zacks Consensus Estimate by 4 cents.  

The Westminster, CO-based company has been making progress on its near-term priorities for sustained top and bottom-line growth. This includes efforts to reduce leverage levels, re-engineer the Space Solutions business, and position the Imagery and Services businesses for long-term growth. It is focused on creating a leaner organization and reducing costs, while improving capital structure to prioritize investments in its core areas of Earth Intelligence and Space Infrastructure.

That said, Maxar is expected to have recorded lower aggregate revenues on a year-over-year basis in the fourth quarter, primarily due to headwinds in the Space Systems segment despite a favorable Imagery and Services unit.

Factors at Play

During the fourth quarter, Maxar secured a $14.2 million contract to develop automated, cloud-based geospatial intelligence (GEOINT) analysis architecture for the U.S. Air Force. It delivered the robotic Sample Handling Assembly for NASA’s Mars 2020 rover. These are expected to get reflected positively in the upcoming results.

The company inked a joint statement of strategic intent and cooperation with the Australian Space Agency in the quarter. Maxar closed the Palo Alto real estate sale and leaseback agreements for a gross sale price of $291 million. It utilized the sale proceeds and senior secured notes offering to repay all of the borrowings that were outstanding as of Sep 30, 2019 under revolving credit facility and term loans.  

Maxar garnered important wins in its Space Systems business, including initial work on Canadarm3 and the TEMPO instrument for NASA. The company saw solid bookings and revenue growth in Imagery and Services segments. These include a four-year contract for Global Enhanced GEOINT Delivery service, and the addition of another country to the installed base for its Rapid and Direct Access Program. The company’s performance is expected have benefited from these positives.

For the December quarter, the Zacks Consensus Estimate for total revenues stands at $435 million, implying a decline of 12.3% from the year-ago quarter’s reported figure. Adjusted loss per share is pegged at 16 cents, indicating 88.4% narrower loss year over year.

What Our Model Says

Our proven model doesn’t predict an earnings beat for Maxar this time around. 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Maxar’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -193.88% as the former is pegged at a loss of 48 cents and the latter at a loss of 16 cents.

Maxar Technologies Ltd. Price and EPS Surprise

Maxar Technologies Ltd. Price and EPS Surprise

Maxar Technologies Ltd. price-eps-surprise | Maxar Technologies Ltd. Quote

Zacks Rank: Maxar currently has a Zacks Rank #4 (Sell).

Stocks to Consider

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this season:

TransMedics Group, Inc. TMDX is slated to release quarterly results on Mar 2. It has an Earnings ESP of +0.85% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Benefitfocus, Inc. BNFT is scheduled to release results on Mar 3. The company has an Earnings ESP of +35.48% and carries a Zacks Rank #2.

Fox Factory Holding Corp. FOXF has an Earnings ESP of +1.60% and carries a Zacks Rank of 2. The company is set to report results on Mar 3.

Zacks Top 10 Stocks for 2020

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?

Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.

Access Zacks Top 10 Stocks for 2020 today >>