A busy week for defense contractor earnings continued on a positive note Thursday. L3Harris boosted its guidance after clearing earnings views. Textron also topped results in its morning release. On Wednesday, General Dynamics stock surged out of a buy zone after its second-quarter report.
Lockheed Martin, RTX and Northrop Grumman reported on Tuesday. Booz Allen Hamilton is due on Friday.
L3Harris, Textron Top Views
L3Harris reported a 16% increase in earnings to $2.78 per share adjusted. Revenue rose 2% to 5.43 billion.
FactSet expected earnings of $2.48 per share on $5.31 billion in revenue.
"This marks a clear inflection point," CEO Christopher Kubasik said. "Defense is entering a generational investment cycle, as U.S. and allied budgets grow rapidly."
He noted that demand is accelerating and L3Harris' portfolio is aligned with key growth areas, including space, missiles, shipbuilding, autonomy, resilient communications and the Golden Dome.
L3Harris lifted its outlook on results. The contractor now expects revenue around $21.75 billion for the year, up from its prior forecast for $21.4 billion to $21.7 billion. L3Harris raised its earnings guidance by 10 cents to range from $10.40 to $10.60 per share adjusted. It raised its adjusted free cash flow estimate to $2.65 billion. L3Harris previously expected $2.4 billion to $2.5 billion.
L3Harris rose 1.3% Thursday.
LHX stock on the move pushed out of a cup-with-handle buy zone, after clearing the 257.79 buy point on July 7. Shares are up almost 30% so far this year.
Textron earnings rose 1 cent to $1.55 per share adjusted, beating FactSet views for a 9-cent decline. Revenue climbed 5.4% to $3.7 billion, which cleared estimates for $3.64 billion in sales.
CEO Scott Donnelly noted that revenue grew across its commercial aircraft and helicopter business, as well as Bell's FLRAA program. Operations at Textron Aviation improved as production ramped up, he added.
Textron maintained its full-year forecast for earnings between $6 and $6.20 per share adjusted. However, the midpoint of that forecast is below FactSet views for $6.15 per share. The company raised its outlook for its manufacturing cash flow by $100 million, to range from $900 million to $1 billion. The new guidance includes the expected impacts from the recently-enacted U.S. tax legislation.
Textron shares fell 7.2% Thursday, paring its gain on the year to 5.8%.
For Booz Allen Hamilton results on Friday, FactSet expects a 5% increase in earnings to $1.45 per share on less than 1% revenue growth to $2.96 billion.
BAH stock continues to rebound off its 50-day line, with a 3.6% gain on Wednesday. Shares ticked lower early Thursday.
General Dynamics Clears Views
General Dynamics reported Q2 earnings of $3.74 per share, up almost 15% from last year, to beat FactSet estimates for $3.55 per share. Revenue increased about 9% to $13.04 billion, also ahead of views for $12.38 billion.
Aerospace revenue rose 4.1% to $3.06 billion, slightly below expectations for $3.11 billion. Marine systems sales jumped 22.2% to $4.22 billion. FactSet expected $3.6 billion in revenue for the segment.
Combat systems ticked down a fraction to $2.28 billion, like aerospace revenue, also missing estimates for $2.29 billion.
Technologies revenue climbed 5.5% to almost $3.48 billion. Analysts had predicted $4.45 billion in technology sales.
General Dynamics recorded $28.3 billion in orders, while the backlog at quarter-end stood at $103.7 billion.
CEO Phebe Novakovic in the release noted that all four segments saw earnings and revenue growth during the first half of the year, with companywide margins expanding 50 basis points.
"Our strong cash flow and healthy backlog position us well to have a good second half," Novakovic said.
General Dynamics Stock
GD stock jumped 6.5% Wednesday on results, jumping out of a buy zone for a saucer-with-handle base. The stock eased less than than 1% Thursday.
Shares are up about 10% from the 286.80 buy point after first clearing the entry on June 25.
General Dynamics has advanced 19% so far this year.
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