Lockheed Martin Corporation ( LMT - Analyst Report ) , which was first highlighted as a Growth and Income pick on Feb 2, 2006, continues to impress. The company exceeded analysts’ earnings expectations in nine out of the past 10 quarters. Furthermore, LMT recently raised its full-year earnings per share guidance. The company is currently yielding 1.5%, with a five-year average dividend yield of 1.3%.

Full Analysis

Lockheed Martin Corporation is a global enterprise principally engaged in the research, design, development, manufacture and integration of advanced-technology systems, products and services. The company operates in five business segments: aeronautics, electronic systems, space systems, integrated systems and solutions and information and technology services.

LMT was featured as a Growth and Income pick on Feb 2. At the time, the company was a Zacks #1 Rank due to its history of beating the Street’s estimates coupled with rising profit forecasts. Needless to say, things haven’t changed much, which is obviously a good thing for investors of LMT.

The company surprised to the upside in nine out of the past 10 quarters by an average margin of 11.2%. Moreover, LMT met or topped analysts’ expectations in 15 of the last 16 quarters.

Higher information technology and satellite sales fueled a strong second quarter. On Jul 25, the company reported a 12.9% positive earnings surprise with profits of $1.31 per share. LMT achieved earnings of 96 cents in the prior-year period. Revenues increased 7.5% to $10 billion.

For the first six months of 2006, profits and revenues were up 44.6% and 7.9%, respectively, when compared to the first six months of 2005. Solid financial results pushed LMT to raise its full-year 2006 earnings per share guidance to between $5.10 and $5.30, versus its prior outlook between $4.65 and $4.85 per share.

Since the release of its second-quarter results, analysts’ estimates have been on the rise. Over the past week, consensus estimates for this quarter and next are up 5.2% and 4.7%, respectively. Seven analysts submitted upward revisions for this quarter while six did so for next quarter. Profit forecasts for this year and next rose 6.9% and 5.0%, respectively, over the same period of time, and reflect upward adjustments by seven analysts.

On Jun 22, LMT declared a quarterly cash dividend of 30 cents per common share of stock. The company is currently yielding 1.5%, with a five-year average dividend yield of 1.3%. LMT’s return on equity exceeds that of the industry average—26% compared to 17%. With a large percentage of its business coming from the government sector, LMT should continue to benefit from higher defense spending for the remainder of the Bush Administration. Earnings per share are forecasted to grow 10.5% over the next 3-5 years.