Welcome!

News Feed Item

Zacks Industry Outlook Highlights: Embraer, General Dynamics, Wesco Aircraft Holdings, Huntington Ingalls Industries and Northrop Grumman

CHICAGO, April 17, 2014 /PRNewswire/ -- Today, Zacks Equity Research discusses the Aerospace & Defense, including Embraer S.A. (NYSE:ERJ-Free Report), General Dynamics Corp. (NYSE:GD-Free Report), Wesco Aircraft Holdings, Inc. (NYSE:WAIR-Free Report), Huntington Ingalls Industries Inc. (NYSE:HII-Free Report) and Northrop Grumman Corp. (NYSE:NOC-Free Report).

Zacks Investment Research, Inc., www.zacks.com

Industry: Aerospace & Defense

Link: http://www.zacks.com/commentary/32190/

The aerospace & defense sector posted an impressive performance in 2013, braving issues like sequestration, budget cuts and cancellation of big-ticket programs. In fact, in the year-end quarter, all the defense companies in our universe, except one, surpassed the Zacks Consensus Estimate.

The highest positive surprise of 85 cents was clocked by Embraer S.A. (NYSE:ERJ-Free Report) while the lowest surprise of 0.6% came from General Dynamics Corp. (NYSE:GD-Free Report). On the contrary, Wesco Aircraft Holdings, Inc. (NYSE:WAIR-Free Report) missed the Zacks Consensus Estimate by 6.9%.

The aerospace sector's earnings are expected to decline 5.1% in the first quarter of 2014 compared with 20.0% growth in the last quarter. However, the sector will likely witness 1.0% top-line growth in the to-be-reported quarter as against a 0.1% fall in the prior quarter.

For 2014 on the whole, the sector is expected to register bottom-line growth of 4.5% which will further rise to 10.5% in 2015. The top line will likely see 0.9% and 1.5% growth in 2014 and 2015, respectively.

For a detailed look at the earnings outlook for this sector and others, please see our weekly Earnings Outlook.

OPPORTUNITIES

Although the threat from sequestration remains for periods beyond fiscal 2015 and casts a shadow of uncertainty on long-term funding, we would prefer Huntington Ingalls Industries Inc. (NYSE:HII-Free Report), a Zacks Rank #1 (Strong Buy) stock, posting strong financial results and surpassing our estimates by 34.7% on an average in the last 4 quarters. This upside was driven by higher revenues from surface combatants and the Legend-class NSS program.

Since the start of 2014, there have been a number of share price gainers with General Dynamics witnessing the highest increase of around 11.5% so far buoyed by consistent contract wins and a stable fourth quarter performance. It posted a 7.5% positive surprise over the last four quarters on an average.

With approximately $2.7 billion of free cash flow exiting 2013, General Dynamics' solid financial position well cushions the dividend payout. At the end of the fourth quarter 2013, its cash and cash equivalents stood at $5.3 billion, reflecting an increase of almost 61.0% from year-end 2012.

This Zacks Rank #2 (Buy) company recently boosted its quarterly dividend by 10.7%, marking the 17th consecutive increase and bringing the annualized payout to $2.48 per share.

Among the defense top players, Northrop Grumman Corp. (NYSE:NOC-Free Report) has delivered a year-to-date return of about 2.4%, outperforming the S&P return of negative 1.4%. With a market cap of $25.29 billion, the defense major has a one-year return of 61.8%, higher than the S&P 500 return of 14.3%.

This Zacks Rank #2 (Buy) company successfully beat the Zacks Consensus Estimate on both the top and the bottom line in the fourth quarter of 2013 and has a positive earnings surprise of about 3.1% on an average over the last 4 quarters. The earnings beat was attributable to a lower share count and strong operating performance.

In a nutshell, a steady flow of contracts, which also include substantial international orders, a funded backlog of $22.5 billion as of Dec 31, 2013, the introduction of new products, and the commitment to return wealth to its shareholders make this stock attractive.

The world's third largest commercial aircraft manufacturer, Embraer SA's fourth-quarter earnings jumped 177.0% from the prior-year quarter and beat the Zacks Consensus Estimate by 70.8%. This Zacks Rank #2 (Buy) company's stellar performance was backed by strong demand for its commercial and executive jets.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros.  In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time!  Click here for your free subscription to Profit from the Pros.

Get the full Report on ERJ- FREE

Get the full Report on GD- FREE

Get the full Report on WAIR- FREE

Get the full Report on HII- FREE

Get the full Report on NOC- FREE

Follow us on Twitter:  http://twitter.com/zacksresearch

Join us on Facebook:  http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

[email protected]

http://www.zacks.com

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Logo - http://photos.prnewswire.com/prnh/20101027/ZIRLOGO

SOURCE Zacks Investment Research, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Internet of @ThingsExpo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devic...
"The Striim platform is a full end-to-end streaming integration and analytics platform that is middleware that covers a lot of different use cases," explained Steve Wilkes, Founder and CTO at Striim, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
Everything run by electricity will eventually be connected to the Internet. Get ahead of the Internet of Things revolution and join Akvelon expert and IoT industry leader, Sergey Grebnov, in his session at @ThingsExpo, for an educational dive into the world of managing your home, workplace and all the devices they contain with the power of machine-based AI and intelligent Bot services for a completely streamlined experience.
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, will examine the regulations and provide insight on how it affects technology, challenges the established rules and will usher in new levels of diligence...
SYS-CON Events announced today that Calligo, an innovative cloud service provider offering mid-sized companies the highest levels of data privacy and security, has been named "Bronze Sponsor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Calligo offers unparalleled application performance guarantees, commercial flexibility and a personalised support service from its globally located cloud plat...
SYS-CON Events announced today that Calligo has been named “Bronze Sponsor” of SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Calligo is an innovative cloud service provider offering mid-sized companies the highest levels of data privacy. Calligo offers unparalleled application performance guarantees, commercial flexibility and a personalized support service from its globally located cloud platfor...
What sort of WebRTC based applications can we expect to see over the next year and beyond? One way to predict development trends is to see what sorts of applications startups are building. In his session at @ThingsExpo, Arin Sime, founder of WebRTC.ventures, discussed the current and likely future trends in WebRTC application development based on real requests for custom applications from real customers, as well as other public sources of information.
FinTechs use the cloud to operate at the speed and scale of digital financial activity, but are often hindered by the complexity of managing security and compliance in the cloud. In his session at 20th Cloud Expo, Sesh Murthy, co-founder and CTO of Cloud Raxak, showed how proactive and automated cloud security enables FinTechs to leverage the cloud to achieve their business goals. Through business-driven cloud security, FinTechs can speed time-to-market, diminish risk and costs, maintain continu...
SYS-CON Events announced today that SkyScale will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. SkyScale is a world-class provider of cloud-based, ultra-fast multi-GPU hardware platforms for lease to customers desiring the fastest performance available as a service anywhere in the world. SkyScale builds, configures, and manages dedicated systems strategically located in maximum-securit...
21st International Cloud Expo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Me...
SYS-CON Events announced today that DXWorldExpo has been named “Global Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Digital Transformation is the key issue driving the global enterprise IT business. Digital Transformation is most prominent among Global 2000 enterprises and government institutions.
SYS-CON Events announced today that Datera, that offers a radically new data management architecture, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datera is transforming the traditional datacenter model through modern cloud simplicity. The technology industry is at another major inflection point. The rise of mobile, the Internet of Things, data storage and Big...
"With Digital Experience Monitoring what used to be a simple visit to a web page has exploded into app on phones, data from social media feeds, competitive benchmarking - these are all components that are only available because of some type of digital asset," explained Leo Vasiliou, Director of Web Performance Engineering at Catchpoint Systems, in this SYS-CON.tv interview at DevOps Summit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"Outscale was founded in 2010, is based in France, is a strategic partner to Dassault Systémes and has done quite a bit of work with divisions of Dassault," explained Jackie Funk, Digital Marketing exec at Outscale, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We were founded in 2003 and the way we were founded was about good backup and good disaster recovery for our clients, and for the last 20 years we've been pretty consistent with that," noted Marc Malafronte, Territory Manager at StorageCraft, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.