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Why Huntington Ingalls, Orbital ATK, and TransDigm All Surged This Week
Three Aerospace & Defense Stocks – Three Winners Three of America’s biggest names in aerospace and defense reported earnings this week. The crowd went wild.
What: Huntington Ingalls (NYSE: HII) spiked after reporting earnings Thursday, rising as much as 9.5% before settling down to a 4.4% gain.
So What: Fiscal Q2 revenues eked out a 1.5% gain, rising to $1.75 billion and matching expectations Profitability widened dramatically. Operating profit margins rose 490 basis points, to land at 15.4% Earnings, as a result, shot 57% higher, hitting $3.20 per share, and beating expectations with a stick
Now What: Now here’s the best part: For every $1 of revenue Huntington collected last quarter, it added $2.60 in new contracts. Today, Huntington boasts $24.3 billion worth of backlogged work. At its new-and-improved 15.4% profit margin, that should yield beaucoup profits for years to come.
What: Text Orbital ATK (NYSE: OA) also reported earnings Thursday. Orbital stock’s 6.9% gain eclipsed even Huntington’s strong performance.
So What: Sales for the quarter grew 58%, to $1.13 billion Operating profits on those sales leapt 75%, to $126 million Earnings per diluted share grew 27%, to $1.22
Now What: Orbital ATK even raised guidance. By year-end management expects to have produced: Revenues of up to $4.5 billion And earnings per share of $4.70 If it hits those targets, the stock is selling for a 16 P/E right now – nearly 20% cheaper than the average aerospace stock. Text
What: TransDigm (NYSE: TDG) was trickier, first slumping post-earnings, but then bouncing back with a vengeance to end the week up more than 5%.
So What: Fiscal Q3 sales grew 13%, to $691 million Cash flow increased 7%, to $373.4 million And profitability returned after last year’s Q3 net loss. TransDigm earned $1.75 per share Text
Now What: TransDigm’s numbers fell short of analyst targets (explaining the initial share price slump). But management quickly raised guidance on revenues and earnings, allaying investor concerns – and helping TransDigm to bounce back quickly. Text
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