Al Root
A beat-and-raise quarter sent shares of defense supplier L3Harris Technologies higher in early trading Friday.
The results cap a good week for the sector.
L3Harris reported earnings per share (EPS) of $3.06 from sales of $5.2 billion Thursday evening. Wall Street was looking for EPS of $2.86 and $5.1 billion, respectively. A year ago, L3Harris reported EPS of 2.86 from $4.5 billion in sales.
The big jump in sales came mainly from the acquisition of rocket-engine maker Aerojet Rocketdyne, which added $542 million in sales.
Along with the earnings beat, full-year financial guidance was raised. The company now expects EPS to fall between $12.70 and $13.05, up from prior guidance of $12.40 to $12.80. The new midpoint of about $12.88 is above the current Street consensus call of $12.72 a share.
Vertical Research Partners analyst Rob Stallard called it a good start to the year in a Thursday report. He rates shares Buy and has a $240 price target for the stock.
Investors appear to agree. L3Harris stock was up 1.3% in premarket trading at $210.03 a share while S&P 500 and Nasdaq Composite futures were rising 0.7% and 1%, respectively.
L3Harris' Thursday evening beat followed Northrop Grumman's Thursday morning beat. The company reported EPS of $6.32. Wall Street was looking for $5.78. Northrop shares rose 2.8%.
On Tuesday, Lockheed Martin reported EPS of $6.33. Wall Street was looking for $5.82. Shares opened higher, but closed down 0.3% in response. Coming into Friday trading, shares are up about 0.2% for the week, matching the gain of the S&P 500.
General Dynamics was the exception, reporting EPS of $2.88 on Wednesday. Wall Street was looking for $2.91 a share. The stock dropped 4% after earnings. That miss, however, was due mainly to private jets. General Dynamics didn't deliver any Gulfstream G700 planes that were certified by the FAA at the end of the first quarter. The company's defense businesses were strong.
Boeing reported earnings as well. Investors are mainly focused on the commercial airplane business, but its defense operation swung to a $151 million quarterly profit from a $212 million loss a year ago.
"We're off to a strong start...reporting solid revenue with higher operating margin across all four segments," said L3Harris CEO Christopher Kubasik in a news release.
His defense peers would agree.
L3Harris management hosts a conference call at 8:30 a.m. on Friday to discuss results.
Write to Al Root at allen.root@dowjones.com
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(END) Dow Jones Newswires
April 26, 2024 07:39 ET (11:39 GMT)
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