Boeing Cuts Earnings Outlook on 2Q Loss as GD & Northrop Lift Forecasts on Beats, Booz Allen & CGI Top Street Estimates

MoneyFive government contractors listed in Executive Mosaic’s GovCon Index reported their latest quarterly financial results before U.S. markets opened Wednesday and all earnings per share figures fell above the consensus Wall Street forecast.

Boeing (NYSE: BA) swung to a net loss for its second quarter and lowered its earnings forecast on a $2.05 billion writedown — or $3.23 per share — the airplane maker reported Thursday on continued delays in the Air Force KC-46 refueling tanker program and lowered outlooks in two commercial programs.

Wall Street analysts revised their original $2.25 earnings per share outlook for Boeing’s second quarter to a forecasted net loss of 92 cents after the company announced the charge.

General Dynamics (NYSE: GD) and Northrop Grumman (NYSE: NOC) both lifted their full-year earnings outlook on second quarter earnings beats versus Wall Street’s forecasts, while Booz Allen Hamilton (NYSE: BAH) and CGI Group (NYSE: GIB) also topped analysts’ earnings expectations for their three-month periods.

Boeing, General Dynamics and Northrop operate their fiscal calendars on a January-December basis.

Booz Allen reported results for the first quarter of its 2017 fiscal year that started April 1 and CGI stated figures for the third quarter of its 2016 fiscal year that began on July 1, 2015.

As of Tuesday’s close, the GovCon Index is up 7.64 percent from the start of the year and 9.71 percent over 12 months.

By comparison, the S&P 500 composite index that includes 11 GCI companies has climbed 6.13 percent for 2016 so far and 4.31 percent over 52 weeks.

Boeing (An S&P 500 and Dow Jones Industrial Average stock):

  • Earnings per share: loss of 44 cents beats Wall Street estimate of negative 92 cents
  • Net income: loss of $234 million, down 121.08 percent from prior year period
  • Revenue: $24.75 billion, up 0.85 percent, beats Wall Street estimate of $22.04 billion
  • Guidance:
    • Earnings lowered to $6.10-$6.30 per share from prior $8.15-$8.35 range,
      below revised $8.50 analyst estimate
    • Revenue unchanged at $93 billion-$95 billion
  • Notes:
    • Defense segment down 4.91 percent to $7.17 billion on lower C-17 and Chinook deliveries
    • Defense segment revenue represented 28.97 percent of total second quarter sales,
      down from 30.72 percent in same period last year
    • Defense segment profit up 8.61 percent to $593 million
    • Defense segment revenue full-year outlook unchanged at $28.5 billion-$29.5 billion
  • Stock is down 8.06 percent from the year’s start and 6.39 percent over 12 months

General Dynamics (An S&P 500 stock):

  • Earnings per share: $2.44 beats Wall Street estimate of $2.31
  • Net income: $758 million up 0.79 percent from prior year period
  • Revenue: $7.66 billion, down 2.79 percent, misses Wall Street estimate of $7.87 billion
  • Guidance:
    • Earnings lifted to $9.70 per share versus $9.52 analyst estimate from prior $9.20 forecast
    • Revenue at $31.6 billion-to-$31.8 billion
  • Notes:
    • Operating margin at 14 percent compared to 13.7 percent in prior year period
    • Year-to-date share repurchases of 8.9 billion with 1.1 million bought in the second quarter
  • Stock is up 4.63 percent from the year’s start and 1.33 percent over 12 months

Northrop Grumman (An S&P 500 stock):

  • Earnings: $2.85 per share beats Wall Street estimate of $2.53
  • Net income: $517 million,  down 2.63 percent from prior year period
  • Revenue: $6 billion, up 2.21 percent, beats Wall Street estimate of $5.99 billion
  • Guidance:
    • Earnings lifted to $10.75-$11.00 per share from prior $10.40-10.70 range
    • Revenue unchanged at $23.5 billion-$24 billion
  • Notes:
    • Higher F-35 deliveries, Global Hawk and Triton unmanned program sales drove sales increase
    • Share repurchase authorization has $3.6 billion remaining
  • Stock is up 16.06 percent from the year’s start and 32.49 percent over 12 months

Booz Allen Hamilton (First quarter for fiscal year 2017):

  • Earnings per share: 46 cents beats Wall Street estimate of 44 cents
  • Net income: $67.82 million, up 5.47 percent from prior year period
  • Revenue: $1.42 billion, up 5.18 percent, beats Wall Street estimate of $1.39 billion
  • Guidance:
    • Earnings unchanged at $1.65-$1.75 per share
    • Revenue unchanged at $5.46 billion-$5.62 billion
  • Notes:
    • Total backlog up 29.03 percent to $12 billion
    • Book-to-bill radio at 1.14x, strongest first-quarter award performance since fiscal year 2012
  • Stock is up 0.78 percent from the year’s start and 20.48 percent over 12 months

CGI Group (Third quarter for fiscal year 2016):

  • Earnings per share: 89 cents beats Wall Street estimate of 67 cents
  • Net income: $207.56 million, up 6.45 percent from prior year period
  • Revenue: $2.02 billion, up 2.64 percent
  • Guidance:
    • Not detailed in release
    • Wall Street forecasts 67 cents earnings per share for fourth quarter and $2.64 EPS full-year
  • Notes:
    • U.S. federal government revenue fell 7.51 percent year-over-year to $254.67 million
    • U.S. federal government revenue represented 12.6 percent of total sales,
      down from 14.2 percent in the prior year period
  • Stock is up 11.84 percent from the year’s start and 14.7 percent over 12 months

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