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Tuesday, Oct 8
Sterne, Agee previews defense earnings
- Those defense contractors with heavy backlogs should fare best amid the government shutdown and 2014 sequester, says Sterne, Agee, which cuts estimates on KEYW Holding (KEYW -0.8%) due to its thin order book.
- Lockheed Martin (LMT -0.5%) - on the other hand - rates a hike in estimates thanks to its relatively large backlog. Look for budget scenarios and capital deployment plans to dominate the Q3 earnings call.
- The Q3 EPS estimate for General Dynamics (GD -1%) of $1.71 is $0.04 higher than consensus, with the team expecting management to reiterate its call for deploying 100% of free cash flow into buybacks and dividends.
- Raytheon (RTN -1.1%) estimates are about inline with consensus, supported by backlogs, international deliveries, and capital returns.
- Military backlogs have held up better than expected, says the team, which should held FLIR Systems (FLIR -0.8%) to a solid quarter.
- Harris (HRS -0.6%) won't get another big pickup in orders like it saw last year at this time, and Sterne's EPS estimate is $0.02 below the $1.13 consensus.
- Mercury Systems' (MRCY -2.2%) EPS is estimated to be a loss of $0.10, $0.02 lower than the Street - reflecting continued order delays in several key programs.