Nucor earnings beat by $0.08, revenue fell short of estimates
ANDOVER, Mass. - Mercury Systems, Inc. (NASDAQ:MRCY), a defense technology company with a market capitalization of $3 billion and annual revenue of $887 million, has been selected by the U.S. Department of Defense for an $8.5 million contract to develop next-generation radio frequency signal conditioning technology, the company announced Wednesday.
The two-year funding, provided through the DoD’s Industrial Base Analysis and Sustainment Program, will support development of an ultra-compact signal conditioning package designed to enhance X-band Active Electronically Steered Array radars used in air, sea, and ground-based applications.
According to the company, the new technology aims to reduce size, weight, and power requirements by more than 80% compared to existing hardware. The project will be conducted in partnership with Systems Innovation Engineering.
Ken Hermanny, Mercury’s Senior Vice President of Signal Technologies, said the award demonstrates the DoD’s confidence in the company’s ability to develop innovative RF solutions utilizing its in-house capabilities.
The technology is expected to support radar programs by enabling faster and more reliable threat detection through U.S.-sourced innovation, according to John Schofield, who supports the IBAS Program as a Chief Scientist assigned to the U.S. Naval Surface Warfare Center’s Crane Division.
Mercury Systems, headquartered in Andover, Massachusetts, provides mission-critical processing technologies for aerospace and defense applications. The company’s products are deployed in more than 300 programs across 35 countries. Investors can access detailed analysis and 8 additional exclusive ProTips about Mercury Systems through InvestingPro’s comprehensive research report, part of its coverage of over 1,400 US stocks.
The announcement was made in a press release statement from Mercury Systems.
In other recent news, Mercury Systems reported its third-quarter earnings for fiscal year 2025, revealing a notable miss in earnings per share (EPS), which came in at -$0.33 compared to the anticipated $0.10. Despite this, the company exceeded revenue expectations, posting $211 million, which represented a 1.5% year-over-year increase. Analysts from Truist Securities, Raymond James, and RBC Capital Markets have adjusted their price targets for Mercury Systems, reflecting varied levels of optimism about the company’s future performance. Truist Securities increased their price target to $60, maintaining a Buy rating, while Raymond James raised theirs to $55, citing the company’s operational momentum and financial results that surpassed expectations. RBC Capital Markets adjusted their target to $50, noting the company’s strong free cash flow and potential for financial stability despite the earnings miss.
Mercury Systems’ recent performance showed an adjusted EBITDA of $24.7 million, with a margin of 11.7%, which was above expectations. The company’s free cash flow for the quarter was reported at $24.1 million, significantly better than anticipated. Analysts highlighted Mercury Systems’ strategic focus on operational improvements and financial performance, with a positive outlook for fiscal year 2026, as noted by Raymond James. Truist Securities expressed confidence in Mercury Systems’ potential to emerge as a leader in the defense technology sector, citing strong global defense demand as a positive factor.
Overall, the company’s strategic direction and financial execution have led to mixed responses from analysts, with some expressing optimism about its growth prospects and others noting the challenges posed by the recent EPS miss. Mercury Systems’ ongoing efforts to improve operational efficiency and financial performance are seen as pivotal in navigating the competitive defense sector landscape.
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