Lockheed Martin Locks In A Big Beat

Lockheed Martin flew past Wall Street’s second-quarter expectations and raised its sights for the year. The defense contractor reported sales of $20.06 billion, up 11% from a year earlier and comfortably topping the approximately $19.3 billion analysts expected. Net earnings climbed to $1.84 billion from a charge-depressed $342 million, while earnings of $7.94 per share beat the $7.19 consensus. Free cash flow swung to $2.92 billion from negative $150 million. Shares surged 10.5% Thursday to $568.59, their best day in more than six years, even as the broader market retreated.

Lockheed’s Missiles and Fire Control business brought the heat, outperforming the company's other three divisions. Segment sales increased 19% to $4.10 billion and operating profit rose 24% to $594 million, as production ramps for PAC-3 and THAAD missile-defense systems added approximately $560 million in sales and Precision Strike Missile production contributed another $100 million. Lockheed booked $65 billion of new orders during the quarter, lifting its total backlog to a record $230.4 billion from $193.6 billion at the end of last year. A seven-year U.S. government contract action worth up to $35 billion to quadruple THAAD interceptor production provided most of the bang, nearly doubling the missile segment’s backlog to $87.9 billion.

Growth was not confined to the missile rack. Aeronautics sales climbed 9% to $8.11 billion, helped by $475 million of higher F-35 production volume, while Rotary and Mission Systems revenue increased 9% to $4.35 billion and Space grew 6% to $3.50 billion. The improvement in profit appeared especially dramatic because last year’s quarter absorbed $1.6 billion of losses on a classified aeronautics contract and two helicopter programs. Similarly, much of the $3.07 billion year-over-year improvement in free cash flow reflected the timing of customer receipts and lower tax payments. Even after accounting for those unusually weak comparisons, however, Lockheed produced higher sales across every business.

Management raised its full-year sales outlook to $79.75 billion to $81.75 billion from $77.5 billion to $80 billion, while increasing its earnings forecast to $29.95 to $30.65 per share from $29.35 to $30.25. Expected free cash flow rose to $7 billion to $7.2 billion from $6.5 billion to $6.8 billion, aided partly by a reduction in planned capital spending. Lockheed’s $230 billion backlog has nearly three years’ worth of orders waiting on the launchpad. Now the challenge is turning them into hardware before the countdown needs a calendar.

Disclaimer: This content is for informational and entertainment purposes only and does not constitute financial or investment advice. The information provided may be outdated or contain inaccuracies. Always conduct your own due diligence and consult a licensed financial advisor before making investment decisions. Investing involves risk, including the potential loss of principal. Unless explicitly stated otherwise, neither Equiscreen, LLC nor its beneficial owners hold any financial interest in the companies mentioned in our articles, and we do not receive compensation for including them. Equiscreen, LLC and its beneficial owners may buy or sell securities of any company referenced in our content at any time and without prior notice, and nothing published by Equiscreen, LLC should be interpreted as a recommendation to buy, sell, or hold any security. Any paid content or income-related materials will be clearly identified as “Sponsored” or “Advertorial,” and corresponding income disclosures can be found at the bottom of the page. For additional information, please contact [email protected].

Top Gainers

Top Losers

U.S. Commodities

2234 N Federal Hwy # 1022
Boca Raton, FL 33431

(561) 264-5726