TASER International Inc. TASR will release third-quarter 2015 earnings results before the market opens on Nov 3, 2015. Last quarter, this company reported a positive earnings surprise of 37.50%. Let’s see how things are shaping up prior to this announcement.
Factors at Play
TASER International’s AXON body-worn video cameras are in demand with the company winning orders from domestic and international police departments. These hot-selling body cameras also come with a cloud storage service called EVIDENCE.com.
In late Sep 2015, TASER International disclosed that it has won an order for 2000 Axon Flex body cameras powered by its Axon Signal technology from the Memphis Police Department. In the prior month, TASER won orders for 429 Axon Flex body cameras from the Wichita Police Department.
Notably, earlier in September, Justice Department's Bureau of Justice Assistance announced that 73 law enforcement agencies throughout the country will receive federal grants worth $20 million to fund the purchase and use of body cameras. An estimated 21,000 body-worn cameras can be purchased with the help of these grants.
The company is steadily investing in research and development (R&D) to maintain its stronghold in emerging technologies such as wearables, mobile and cloud. It plans to further step up R&D expenditure given the expanding market for these devices.
During the third quarter, its U.K. affiliate TASER International BV acquired Tactical Safety Responses Limited (TSR) – its licensed distributor of Smart Weapons and body cameras in the U.K. – thereby expanding its foothold in the country. Apart from TSR, the acquisition of MediaSolv Solutions is amongst the most important steps in its long-term strategy to transform TASER and Axon into a premier, global technology provider for law enforcement.
The growing order book for AXON body cameras and EVIDENCE.com reflects the police departments’ eagerness to improve transparency and restore public trust. In an attempt to do that, they are now deploying their officers with body cameras, thereby ensuring judicious use of firearms as well as fewer appeals against alleged police brutalities. This can only mean more business for TASER.
Earnings Whispers?
Our proven model does not conclusively show that TASER International is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here.
Zacks ESP: TASER International has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 8 cents.
Zacks Rank: TASER International carries a Zacks Rank #3, which when combined with a 0.00% ESP makes a surprise prediction uncertain this season.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Defense Releases
Northrop Grumman NOC reported third-quarter 2015 adjusted earnings of $2.41 per share, beating the Zacks Consensus Estimate of $2.21 by 6% and increasing 3.9% from $2.32 per share in the year-ago quarter.
Lockheed Martin Corp. LMT posted third-quarter 2015 earnings of $2.77 per share, comfortably surpassing the Zacks Consensus Estimate of $2.70 by 2.6%. Earnings also increased 0.4% from $2.76 per share a year ago, as higher fighter jet demand led to increased revenues.
Textron Inc. TXT reported third-quarter 2015 earnings from continuing operations of 63 cents per share, beating the Zacks Consensus Estimate of 60 cents by 5%. The reported figure also increased 10.5% from 57 cents per share in the year-ago quarter.
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