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What's in Store for Aerojet Rocketdyne's (AJRD) Q3 Earnings?

Zacks Equity Research

Aerojet Rocketdyne Holdings, Inc. AJRD is expected to release third-quarter 2019 results soon.

In the last reported quarter, the company delivered a positive earnings surprise of 28.21%. Moreover, Aerojet Rocketdyne’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average being 25.46%.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

Over the last couple of quarters, Aerojet Rocketdyne has been witnessing a steady rise in revenues primarily owing to improved performance from the Aerospace and Defense segment. This must have been driven by the rising global unrest, leading to increased demand for defense products and equipment. Also, the expansionary budgetary amendments undertaken by the current U.S. administration for the past couple of years have been driving the top line for defense players like Aerojet Rocketdyne.  

However, the recent downfall in the U.S. housing market may have kept its Real Estate business segment under pressure.

We anticipate the company’s to-be-reported quarterly results to duly reflect these factors. In line with this, the Zacks Consensus Estimate for third-quarter revenues stands at $505 million, indicating a rise of 1.3% from the year-ago quarter’s reported figure.

Since 2015, when it initiated the first phase of the competitive improvement program (CIP), Aerojet Rocketdyne has been trying hard to reduce its cost structure. In 2017, management approved the second phase of CIP, following which the company consolidated its Sacramento, CA, and Gainesville, VA sites, while centralizing and expanding its existing presence in Huntsville, AL.  The cost-reduction trend is likely to reflect in third-quarter results.

In line with this, the Zacks Consensus Estimate for Aerojet Rocketdyne’s third-quarter earnings is pegged at 46 cents, implying a rise of 9.5% from the prior-year quarter’s reported figure.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Aerojet Rocketdyne this season. 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 is not the case here, as you will see below.

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Aerojet Rocketdyne currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Aerojet Rocketdyne Holdings, Inc. Price and EPS Surprise

Aerojet Rocketdyne Holdings, Inc. Price and EPS Surprise
Aerojet Rocketdyne Holdings, Inc. Price and EPS Surprise

Aerojet Rocketdyne Holdings, Inc. price-eps-surprise | Aerojet Rocketdyne Holdings, Inc. Quote

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Stocks to Consider

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

Ducommun Incorporated DCO is scheduled to report third-quarter 2019 results on Oct 30. The company has an Earnings ESP of +8.79% and a Zacks Rank #3.

Leidos Holdings Inc. LDOS is scheduled to report third-quarter 2019 results on Oct 29. The company has an Earnings ESP of +1.52% and a Zacks Rank #3.

Huntington Ingalls Industries, Inc. HII is expected to report third-quarter 2019 results on Nov 7. The company has an Earnings ESP of +2.09% and a Zacks Rank #3.

5 Stocks Set to Double

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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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Leidos Holdings, Inc. (LDOS) : Free Stock Analysis Report
 
Huntington Ingalls Industries, Inc. (HII) : Free Stock Analysis Report
 
Aerojet Rocketdyne Holdings, Inc. (AJRD) : Free Stock Analysis Report
 
Ducommun Incorporated (DCO) : Free Stock Analysis Report
 
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Zacks Investment Research