Strong Aerospace and Defense Stock Earnings Put These ETFs in Focus – Zacks.com

The Q3 earnings season is now past the halfway mark and has so far been broadly in line with the results seen in other recent quarters with not many surprises. 287 S&P 500 members, accounting for 66.8% of the index’s total market capitalization, have so far reported results.

Total earnings for these companies are up 6.5% on 5.1% higher revenues, with 71.8% beating EPS estimates and 53.7% coming in ahead of revenue estimates. In comparison to the previous quarters, the earnings growth rate is lower for this quarter, while the revenue growth rate is on the higher side. Moreover, as in the preceding quarters, the majority of companies that have been providing guidance have guided lower.

Still, Aerospace & Defense, a relatively smaller sector within the S&P 500, has come out with a series of estimate beating results. Though defense contractors have witnessed lower revenues due to a slowdown in federal spending, the picture was overall reassuring, particularly on the guidance front.

Escalating geo-political tensions in the Middle East and Ukraine have been a blessing in disguise and a long-term positive for the defense companies. Moreover, growing commercial opportunities, and a pick-up in defense spending in a number of developing countries and technological innovation and acquisitions have actually made up for the military budget cuts.

Strong performance in the commercial aerospace sector has been due to fleet renewals by many major airlines and rising demand in international markets (read: Aerospace & Defense ETFs in focus on rising Geopolitical Risks).

Below we have highlighted in greater detail the earnings of some of the major aerospace and defense companies which really drive this sector’s outlook:

Solid Quarterly Results

Aerospace giant The Boeing Company (BA) delivered upbeat third-quarter 2014 results beating the Zacks Consensus Estimate for earnings as well as …read more

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