What To Expect From Leonardo DRS’s (DRS) Q3 Earnings

Aerospace and defense company Leonardo DRS (NASDAQ:DRS) will be reporting earnings this Wednesday before market hours. Here’s what investors should know.

Leonardo DRS met analysts’ revenue expectations last quarter, reporting revenues of $829 million, up 10.1% year on year. It was a strong quarter for the company, with an impressive beat of analysts’ backlog estimates and full-year revenue guidance slightly topping analysts’ expectations.

Is Leonardo DRS a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, analysts are expecting Leonardo DRS’s revenue to grow 13.8% year on year to $924.2 million, slowing from the 15.5% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.28 per share.Leonardo DRS Total Revenue

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Leonardo DRS has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time over the past two years by 5.8% on average.

Looking at Leonardo DRS’s peers in the defense contractors segment, some have already reported their Q3 results, giving us a hint as to what we can expect. RTX delivered year-on-year revenue growth of 11.9%, beating analysts’ expectations by 5.4%, and General Dynamics reported revenues up 10.6%, topping estimates by 3.1%. RTX traded up 10.8% following the results while General Dynamics was also up 3.5%.

Read our full analysis of RTX’s results here and General Dynamics’s results here.

There has been positive sentiment among investors in the defense contractors segment, with share prices up 3.8% on average over the last month. Leonardo DRS is down 5.4% during the same time and is heading into earnings with an average analyst price target of $49 (compared to the current share price of $41.40).

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