Defense Stocks: Raytheon Kicks Off Big Earnings Week, But Sales, Guidance Off Target

Raytheon Technologies (RTX) topped earnings views early Tuesday, but revenue and guidance came in light. Several defense companies, including General Dynamics (GD) report this week as military spending hits a milestone.


Raytheon stock and defense stocks were not yet active Tuesday, all trading within short bases.

Global military spending topped $2 trillion for the first time, growing by 0.7% in 2021 to reach $2.113 trillion, according to a report released Monday by the Stockholm International Peace Research Institute. The growth trend is likely to intensify this year, as Europe hikes defense spending after the Feb. 24 Russian invasion of Ukraine.

Defense stocks surged in late February and expect to benefit from the higher spending. But last week Lockheed Martin (LMT) earnings took a hit from supply disruptions due to the Covid-19 omicron variant and rising inflation.

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Raytheon Earnings

Estimates: Analysts on Wall Street expect Raytheon Technologies earnings to rebound 13% to $1.01 per share on a 4% sales bounce to $15.798 billion.

Results: Raytheon earnings rose to $1.15 a share while revenue advanced 3% to $15.72 billion.

Outlook: For the full year, Raytheon sees adjusted EPS of $4.60-4.80 on sales of $67.75 billion to $68.75 billion. Both are slightly below consensus.

The aerospace and defense giant says it will buy at least $2.5 billion in RTX stock in 2022.

Raytheon, with Lockheed, makes the Javelin anti-tank missile used effectively by Ukrainian troops vs. Russian armored vehicles.

Raytheon Stock

Shares were not yet active early on the stock market today. Raytheon stock dipped 0.9% to 99.68 on Monday but closed above the 50-day line. Intraday, RTX stock undercut that key level and nearly triggered an automatic sell signal, falling almost 7% below a recently cleared 104.44 flat-base buy point.  The relative strength line for RTX stock remains near highs after a solid rally in the past year.

General Dynamics Earnings

Estimates: General Dynamics should see a 1% EPS increase to $2.51 despite a 4% sales gain to $8.996 billion.

Results: Check back early Wednesday. Boeing (BA) also reports early Wednesday.

General Dynamics Stock

Shares were not yet trading Tuesday. General Dynamics edged up 0.2% to 239.16 on Monday. General Dynamics stock neared a 50-day test intraday. GD stock has formed a flat base with a 255.09 buy point, backed by a rising RS line.

Northrop Grumman Earnings

Estimates: Northrop Grumman is likely to post a 9% EPS decline to $9.56 on a 3% sales gain to $8.877 billion.

Results: Check back early Thursday.

Northrop Grumman Stock

Shares of Northrop Grumman (NOC) are quiet early Tuesday. NOC stock retreated 0.8% to 444.02 on Monday, closing above the 50-day line after undercutting it intraday. Northrop Grumman stock successfully broke out after the Russian invasion. It has formed a new cup-with-handle base with a 477.36 buy point above longer consolidations, backed by a rising RS line.

As the B-21 Raider bomber jet production ramps up, the U.S. Air Force on April 7 awarded Northrop Grumman a $108 million contract to buy needed parts in advance.

L3 Harris Technologies Earnings

Estimates: Analysts forecast a 4% decline in L3Harris Technologies earnings to $3.06 per share. Revenue is seen sliding 9% to $4.412 billion.

Results: Check back early Friday.

L3 Harris Stock

Shares of L3 Harris Technologies (LHX) gave up 2% on Monday to 242.92, falling below the 50-day line. L3 Harris Technologies stock has a short base with a 279.81 buy point on top of a longer consolidation. The RS line for LHX stock remains near highs.


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