After the Feb 2015 merger of Orbital Sciences Corporation and the aerospace and defense segment of Alliant Techsystems, the combined entity – Orbital ATK, Inc. OA – reported its first financial results today.
Orbital ATK reported fourth-quarter fiscal 2015 pro forma earnings of $1.14 per share, surpassing the Zacks Consensus Estimate of $1.10 by 3.6% and increasing 70.1% from the comparable year-ago period. The upswing in earnings was caused by higher operating income in all the three segments.
As per GAAP, the company incurred a loss of 87 cents per share as against earnings of $1.17 per share in the prior-year quarter.
Total Revenue
Orbital ATK's total revenues in the fourth quarter fiscal 2015 were $1,116 million, lagging the Zacks Consensus Estimate by 3.3%. Reported revenues also declined by the same margin from the year-ago figure of $1,155 million.
Segmental Update
Flight Systems Group: Segment sales decreased 4.7% to $366 million. The year-over-year decline reflects lower sales in the Launch Vehicles Division.
Defense Systems Group: This segment reported sales of $502 million, down 3.6% year over year due to lower revenues in the Small Caliber Systems Division.
Space Systems Group: This segment registered an increase of nearly 4% in sales to $287 million from the prior-year quarter. This upside was driven by higher revenues and margins in the Commercial Satellite Division.
Highlights of the Release
Total operating income in the reported quarter was up 57.1% to $116.7 million from $74.3 million in fiscal fourth quarter 2014.
Operating margin increased 410 basis points to 10.6% in the reported quarter.
Interest expenses remained flat at $14.5 million in the fourth quarter fiscal 2015.
Capital expenditures in the quarter were $51.3 million. Orbital ATK generated free cash flow of $58.7 million.
Guidance
For calendar year 2015, Orbital ATK expects revenues in the range of $4,350–$4,450 million.
Earnings for the same period are projected in a band of $4.40–$4.60 per share.
Year End Transitions
Beginning next year (Jan 1, 2016), Orbital ATK will start reporting its financial results based on the calendar year. From Apr 1, 2015 to Dec 31, 2015, the company will go through a transition period.
Other Releases in the Sector
The Boeing Co. BA delivered first-quarter 2015 adjusted earnings of $1.97 per share, beating the Zacks Consensus Estimate of $1.81 by 8.8%.
Lockheed Martin Corp. LMT reported quarterly earnings of $2.74 per share, comfortably surpassing the Zacks Consensus Estimate of $2.48 by 10.5%.
Northrop Grumman Corp. NOC delivered first-quarter 2015 adjusted earnings of $2.14 per share, missing the Zacks Consensus Estimate of $2.26 by 5.3%.
Zacks Rank
Orbital ATK currently sports a Zacks Rank #1 (Strong Buy).
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