Earnings season: when defense money shows its cards
From October 20, the big arms makers report. Here's what each date means, what Palantir has to beat, and why Rheinmetall is in the doghouse.
Next note. Let's follow the money.
The calendar
Northrop Grumman and RTX report on October 20. Lockheed Martin on October 22, before markets open, with a call at 8:30 a.m. Eastern. Saab on October 23. L3Harris, Huntington Ingalls and Kongsberg on October 29, and General Dynamics on October 30. Palantir follows around November 2, and Rheinmetall on November 5.
Why these reports matter
They show whether war demand from Iran, Ukraine and the Gulf is turning into real profits. And there's a lot of new money. Of about $152 billion in extra military money from last year's big budget law, the Pentagon put about $142 billion, 93%, under contract before October 1. Roughly $10 billion missed the deadline and faces an automatic 8.3% cut. That's about $830 million of buying power lost.
Who wins
RTX has had a big few weeks: a multiyear deal worth up to $20.7 billion to nearly double AMRAAM missile production, and up to $6.3 billion for SM-3 IB interceptors. Watch how much that adds to its backlog.
For us civilians
When you hear these numbers on the news this month, you'll know what they're measuring. This is not financial advice. Read the actual results before you decide anything about your money.
Palantir closed Friday at a record $209.05 after Barclays set a $265 price target and Goldman Sachs upgraded it. The company's own guidance is about $2.16 billion in revenue for the quarter; analysts expect about $2.18 billion. In the last five quarters it beat its own forecast by 5.7% or more, which would mean roughly $2.29 billion this time. At a record high, results that only meet hopes could still disappoint.
Europe looks different. Bank Berenberg cut Rheinmetall from Buy to Hold and its target from €1,600 to €1,020. The shares ended Friday around €937, down about half over the past year.
What we don't know yet
- Whether other banks follow Berenberg on Rheinmetall.
- Whether the companies can actually build faster, or just sign more orders.
Note this down
Oct 20 and Oct 22 in your calendar. Palantir around Nov 2, Rheinmetall Nov 5.