What's in Store for Virgin Galactic's (SPCE) Q2 Earnings?
Virgin Galactic Holdings, Inc. SPCE is scheduled to release second-quarter 2021 results on Aug 5, after market close. In the last reported quarter, the company delivered a negative earnings surprise of 77.42%.
In the trailing four quarters, Virgin Galactic came up with a negative earnings surprise of 27.62%, on average.
Let's take a closer look at the factors impacting the company’s upcoming results.
Factors at Play
Virgin Galactic witnessed minimal revenue generation throughout 2020, induced by a shift in focus to execute test-flight programs and ensure the safety of its workforce, given the challenges associated with the prolonged COVID-19 pandemic. Consequently, we expect this trend to have continued during the second quarter of 2021, thereby affecting the top-line performance.
During the first-quarter earnings call, the company revealed its intentions to reopen sales for a private astronaut market in the second quarter. By reopening sales, the company intends to satisfy a portion of the consumer demand with its expanding fleet size. We expect this strategic move to have contributed favorably to its second-quarter revenues.
On the cost side, Virgin Galactic is expected to have incurred escalated expenses in the second quarter due to the unrelenting pandemic impacts on its operations. Further, the company has been witnessing a rise in vehicle tooling costs over the past few quarters as it continues to prepare some of its facilities for commercial operations, a trend that most likely continued in the second quarter as well.
Moreover, the company has been experiencing ongoing delays in its business and operations due to the pandemic, which triggered accumulated impacts on both schedule and cost efficiency, a trend that most likely continued through the second quarter too.
Consequently, the aforementioned factors might have adversely impacted the company’s bottom-line performance in the soon-to-be-reported quarter. Notably, the Zacks Consensus Estimate for second-quarter earnings is currently pegged at a loss of 30 cents per share, in line with the prior-year quarter’s reported loss.
Virgin Galactic Holdings, Inc. Price and EPS Surprise
Virgin Galactic Holdings, Inc. price-eps-surprise | Virgin Galactic Holdings, Inc. Quote
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Virgin Galactic this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here as explained below.
Earnings ESP: Virgin Galactic has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Virgin Galactic carries a Zacks Rank #5 (Strong Sell).
A Stock to Consider
Here is a stock you may want to consider as it has the right combination of elements to post an earnings beat in its upcoming release:
L3Harris Technologies LHX has an Earnings ESP of +0.43% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Recent Defense Releases
Raytheon Technologies’ RTX second-quarter 2021 adjusted earnings per share (EPS) of $1.23 outpaced the Zacks Consensus Estimate of 92 cents by 33.7%.
General Dynamics GD reported second-quarter 2021 earnings from continuing operations of $2.61 per share, which beat the Zacks Consensus Estimate of $2.52 by 3.6%.
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