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Defense Stock Roundup: LMT, HXL, RTX Beat on Q1 Earnings, BA Misses

Aparajita Dutta
·6-min read

In the past five trading sessions, we witnessed results of some of the key defense players who mostly came up with better-than-expected quarterly performance. The U.S. stock market as a whole also performed well with bigwigs like Apple and Facebook posting encouraging results.

Consequently, major defense stock indices ended in the green, in the trailing five trading sessions. The S&P 500 Aerospace & Defense (Industry) index rose 1.1%, while the Dow Jones U.S. Aerospace & Defense index inched up 0.7% in the aforementioned time period.

In the past week, Lockheed Martin LMT, Hexcel Corp. HXL, Raytheon Technologies RTX, The Boeing Company BA, General Dynamics GD and Teledyne Technologies TDY reported their Q1 results.

Recap of Past Week’s Important Stories

1.    Lockheed Martin’s first-quarter 2021 earnings of $6.56 per share surpassed the Zacks Consensus by 3.8% and improved 7.9% from the year-ago quarter’s figure. Its net sales amounted to $16,258 million, which missed the Zacks Consensus Estimate by 0.5% but increased 3.9% from the year-ago quarter.

Lockheed Martin ended the first quarter (on Mar 28, 2021) with $147.4 billion in backlog, up 0.2% from $147.1 billion at the end of 2020.

Lockheed Martin’s cash and cash equivalents totaled $2.93 billion as of Mar 28, 2021, compared with $3.16 billion at the end of 2020 (read more: Lockheed Martin Q1 Earnings Beat Estimates, Sales Up Y/Y).

2.    Hexcel Corp.’s first-quarter 2021 loss of 10 cents per share came in narrower than the Zacks Consensus Estimate of a loss of 16 cents. Its net sales totaled $310.3 million, surpassing the Zacks Consensus Estimate by 4.1%. However, the top line witnessed a decline of 42.6% year over year.

Adjusted operating income in the first quarter of 2021 was $1.9 million, or 0.6% of sales, compared to adjusted operating income of $80.4 million, or 14.9% of sales in 2020.

As of Mar 31, 2021, Hexcel Corp.’s cash and cash equivalents were $82 million compared with $103.3 million as of Dec 31, 2020 (read more: Hexcel Q1 Loss Narrower Than Expected, Revenues Beat).

3.    Raytheon Technologies’ first-quarter 2021 adjusted earnings per share (EPS) of 90 cents outpaced the Zacks Consensus Estimate by 2.3%, but declined 32.3% from the year-ago quarter’s figure. Its first-quarter sales of $15,251 million missed the Zacks Consensus Estimate by 0.8%. The sales figure however increased 34.3% year over year.

Raytheon Technologies had cash and cash equivalents of $8,579 million as of Mar 31, 2021, compared with $8,802 million as of Dec 31, 2020.

Raytheon Technologies has raised the lower end of its revenue and earnings view for 2021 (read more: Raytheon Technologies' Q1 Earnings Beat, Sales Miss).

4.    Boeing’s adjusted loss of $1.53 per share for first-quarter 2021 came in much wider than the Zacks Consensus Estimate of a loss of $1.17. However, the bottom line improved from the year-ago quarter’s loss of $1.70. Its revenues amounted to $15.22 billion, which beat the Zacks Consensus Estimate by 5.8% but declined 10% year over year.

Backlog at the end of first-quarter 2021 inched up to $364 billion from $363.4 billion at the end of fourth-quarter 2020.

Boeing exited the first quarter with cash and cash equivalents of $7.06 billion, and short-term and other investments of $14.86 billion (read more: Boeing's Q1 Earnings Lag Estimates, Revenues Beat).

5.    General Dynamics’ first-quarter 2021 earnings from continuing operations of $2.48 per share exceeded the Zacks Consensus Estimate by 7.4% and also improved 2.1% year over year. Its first-quarter revenues of $9,389 million surpassed the Zacks Consensus Estimate by 4.6% and improved 7.3% from the year-ago quarter.

The company recorded a total backlog of $89.6 billion, up 4.5% year over year.

As of Apr 4, 2021, General Dynamics’ cash and cash equivalents were $1,811 million compared with $2,824 million as of Dec 31, 2020 (read more: General Dynamics' Q1 Earnings Beat, Revenues Up Y/Y).

6.    Teledyne Technologies’ first-quarter 2021 earnings of $3.02 per share surpassed the Zacks Consensus Estimate by 16.6% and also improved 12.9% from the year-ago quarter. Its total sales worth $805.7 million exceeded the Zacks Consensus Estimate by 3.3% and increased 2.7% from the prior-year quarter.

Teledyne’s cash and cash equivalents totaled $3,234.2 million as of Apr 4, 2021, compared with $673.1 million at the end of 2020.

For 2021, the company expects to generate adjusted earnings per share of $12.00-$12.20 (read more: Teledyne Technologies Q1 Earnings Beat, Revenues Up Y/Y).

Performance

Over the past five trading sessions, the defense biggies put up a mixed show. While Lockheed, Northrop and General Dynamics witnessed a drop in their share price, others observed gain.

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In the last six months, the industry's performance was impressive, except that for Raytheon Technologies. Boeing gained the most with its shares up 58.9%, followed by Textron, which gained 10.5%.

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

Company

Past Week

Last 6 Months

LMT

-3.23%

6.29%

BA

0.55%

58.94%

GD

-0.26%

1.08%

RTX

5.47%

-0.46%

NOC

-0.77%

6.21%

TXT

4.66%

10.53%

LHX

-2.16%

4.12%

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The Boeing Company (BA) : Free Stock Analysis Report
 
General Dynamics Corporation (GD) : Free Stock Analysis Report
 
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
 
Hexcel Corporation (HXL) : Free Stock Analysis Report
 
Teledyne Technologies Incorporated (TDY) : Free Stock Analysis Report
 
Raytheon Technologies Corporation (RTX) : Free Stock Analysis Report
 
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