Orbital ATK, Inc. OA reported second-quarter 2015 pro forma earnings of $1.28 per share, outpacing the Zacks Consensus Estimate of $1.02 by 25.5% and increasing 16.4% from the comparable year-ago period. The upswing in earnings was caused by higher operating income at Flight Systems Group and Space Systems Group.
As per GAAP, the company reported earnings of $1.22 per share compared with 96 cents share in the prior-year quarter.
Total Revenue
Orbital ATK's total revenues in the second quarter 2015 were $1,130 million, beating the Zacks Consensus Estimate by 4.3%. Reported revenues increased by 7.1% from the year-ago figure of $1,055 million.
Segmental Update
Flight Systems Group: Segment sales increased 8.3% to $398.1 million. The year-over-year upside reflects higher sales in the Launch Vehicles Division.
Defense Systems Group: This segment reported sales of $439.8 million, down 0.3% year over year due to lower revenues in the Small Caliber Systems Division.
Space Systems Group: This segment registered an increase of 16.7% in sales to $310.1 million from the prior-year quarter. This upside was driven by higher revenues in the Commercial Satellite Division and the Civil and Defense Satellites Division.
Highlights of the Release
Total operating income in the reported quarter was up 13.6% to $131.6 million from $115.8 million in second-quarter 2014. Overall operating income increased primarily due to higher operating income at Flight Systems Group and Space Systems Group.
Orbital ATK incurred interest expenses of $29.9 million in the first half of 2015 compared with $30.5 million in the first six months of 2014.
Capital expenditures in the quarter were $26.2 million compared with $18.5 million in the prior-year quarter. Adjusted free cash outflow for the second quarter was $5.5 million.
As of Jul 5, 2015, Orbital ATK’s firm backlog was around $8.4 billion and its total backlog was approximately $12.2 billion including options, indefinite quantity contract and undefinitized orders. The company clocked orders worth $1,360 million in the second quarter.
Guidance
For 2015, Orbital ATK widened the range of revenue guidance to $4,425–$4,500 million from an earlier projection of $4,350–$4,450 million.
Earnings for the same period are now projected in a band of $4.60–$4.80 per share, up from $4.40–$4.60 per share guided earlier.
Other Releases in the Sector
Spirit AeroSystems Holdings, Inc. SPR posted second-quarter 2015 adjusted earnings of $1.09 per share, beating the Zacks Consensus Estimate of 97 cents by 12.4%.
Raytheon Company RTN reported second-quarter 2015 earnings from continuing operations of $1.65 per share, beating the Zacks Consensus Estimate of $1.63 by 1.2%.
Rockwell Collins Inc. COL reported third-quarter fiscal 2015 (ending Jun 30, 2015) earnings per share of $1.33, beating the Zacks Consensus Estimate of $1.31 by 1.5%
Zacks Rank
Orbital ATK currently carries a Zacks Rank #4 (Sell).
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