The aerospace and defense stocks that have released their Q3 results have come up with a mixed performance. Some players in this industry, namely Huntington Ingalls Industries Inc. HII, Curtiss-Wright CW and Spirit Aerosystems SPR are set to reveal their quarterly figures tomorrow.

Factors That Influenced Aerospace & Defense Stocks

Growing global air travel demand, driven by a steady recovery in the domestic space as well as improving trends observed in international air travel, is expected to significantly boost the Q3 results of aerospace and defense stocks, particularly those engaged in commercial aviation. Boeing witnessed a solid year-over-year surge of 31.8% in its commercial shipments during the third quarter. With Boeing being the largest jet maker in the nation, we expect the Q3 results of the remaining aerospace majors to reflect a similar improvement in delivery trends. Such solid deliveries must have boosted the overall top-line growth of the Aerospace sector, which houses all aerospace and defense stocks.

Stocks in this industry that are more focused on combat must have gained as a result of steady government support. Moreover, a steady order flow observed in the past couple of quarters, along with improving delivery trends in recent times, buoyed by recovering economic trends are projected to have bolstered Q3 revenues of aerospace and defense stocks.

However, persistent headwinds like supply chain disruption along with some unfavorable project timing as the result of coronavirus might have an adverse impact on the Q3 bottom line of the industry.

Q3 Projections

Aerospace sector Q3 earnings are expected to decline 50.9% from the prior-year quarter’s reported figure, while revenues are projected to improve 4.8%.  

For more details on quarterly releases, you can go through the latest Earnings Preview.

Aerospace & Defense Stocks to Watch

Let's take a look at three defense companies that are scheduled to report third-quarter 2022 earnings on Nov 3 and find out how things have shaped up prior to the announcements.

Huntington Ingalls’ Q3 results are likely to reflect the solid sales performance in the majority of its segments. While higher volume growth in amphibious assault ships is expected to have boosted Ingalls unit’s revenues, higher volume growth in aircraft carriers must have bolstered the top line of the Newport New unit’s growth.

However, increased research and development costs and higher general & administrative expenses might have dented the overall margin performance, thus adversely impacting the bottom line of the company (read more: Will Segmental Performance Aid Huntington's Q3 Earnings?).

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.

Huntington Ingalls currently has an Earnings ESP of +0.35% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Huntington Ingalls Industries, Inc. Price and EPS Surprise

Huntington Ingalls Industries, Inc. price-eps-surprise | Huntington Ingalls Industries, Inc. Quote

Curtiss-Wright delivered a four-quarter average earnings surprise of 7.58%. The Zacks Consensus Estimate for the company’s third-quarter earnings, pegged at $2.03, implies an 8% improvement from the year-ago quarter’s reported figure.

The consensus mark for the company’s third-quarter revenues, pegged at $658.3 million, suggests a 6.1% improvement from the year-ago quarter’s reported figure. Curtiss-Wright has an Earnings ESP of -0.62% and Zacks Rank #3.

CurtissWright Corporation Price and EPS Surprise

CurtissWright Corporation price-eps-surprise | CurtissWright Corporation Quote

Spirit AeroSystems delivered a four-quarter average negative earnings surprise of 100.31%. The Zacks Consensus Estimate for the company’s third-quarter loss, pegged at 39 cents, implies an improvement from the year-ago quarter’s reported loss figure of $1.13.

The consensus mark for the company’s third-quarter revenues, pegged at $1.30 billion, suggests a 32.2% improvement from the year-ago quarter’s reported figure. Spirit AeroSystems has an Earnings ESP of +51.95% and Zacks Rank #3.

Spirit Aerosystems Holdings, Inc. Price and EPS Surprise

Spirit Aerosystems Holdings, Inc. price-eps-surprise | Spirit Aerosystems Holdings, Inc. Quote

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