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Why Is Lockheed Martin (LMT) Up 3.6% Since the Last Earnings Report?
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A month has gone by since the last earnings report for Lockheed Martin Corporation (LMT - Free Report) . Shares have added about 3.6% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Lockheed Martin Beats on Q1 Earnings, Backlog Drops
Lockheed Martin reported first-quarter 2017 earnings from continuing operations of $3 per share, beating the Zacks Consensus Estimate of $2.76 by 8.7%. Earnings came in line with the year-ago period’s bottom line figure.
Operational Highlights
In the reported quarter, total revenue came in at $11.06 billion, missing the Zacks Consensus Estimate of $11.26 billion by 1.8%.
However, the company’s revenues increased 6.6% from $10.37 billion a year ago. Notably, all segments registered year-over-year growth in sales.
Backlog
Lockheed Martin ended the first quarter (on Mar 26, 2017) with $93.5 billion in backlog, down 2.8% from $96.2 billion at 2016-end. Of this, the Aeronautics segment accounted for $32 billion while Rotary and Mission Systems contributed $27.5 billion. Also, $19.5 billion came from Space Systems and $14.5 billion from Missiles and Fire Control.
Segmental Performance
Aeronautics: Sales increased 8% year over year to $4.1 billion, driven by higher net sales for the F-35 as well as F-16 programs.
Operating profit also advanced 4% year over year to $436 million, while operating margin dropped 50 basis points (bps) to 10.6%.
Missiles and Fire Control: Quarterly sales improved 4% year over year to $1.5 billion due to higher sales for fire control programs as well as air and missile defense programs.
Operating profit dropped 0.9% year over year to $219 million and operating margin contracted 70 bps to 14.7%.
Rotary and Mission Systems: Quarterly sales of $3.1 billion increased 3% from the prior-year quarter on higher revenues from Sikorsky.
Operating profit declined 53% year over year to $108 million, while operating margin contracted 410 bps to 3.5%.
Space Systems: Sales increased 11% year over year to about $2.4 billion in the first quarter, driven by sales improvement owing to the company’s increased interest in Atomic Weapons Establishment Venture.
Operating profit increased 18% to $288 million while operating margin improved 70 bps to 12.2% in the quarter.
Financial Condition
Cash and cash equivalents were $2.22 billion as of Mar 26, 2017, compared with $1.84 billion at the end of 2016. Long-term debt was $14.28 billion, almost in line with the 2016-end level.
Cash from operations at the end of the first quarter remained flat at $1.67 billion, compared to 2016-end level.
During the quarter, the company repurchased 1.9 million shares for $500 million compared with the buyback of 2.4 million shares for $501 million a year ago. The company paid dividends worth $544 million to its shareholders, compared to the year ago period’s level of $533 million.
Guidance
For 2017, Lockheed Martin has revised its financial guidance. The company expects to generate revenues in the range of $49.5–$50.7 billion, higher than the earlier provided projection of $49.4–$50.6 billion.
On the bottom-line front, the company now expects its earnings per share to be in the range of $12.15–$12.45 during 2017, lower than the earlier announced guidance of $12.25–$12.55.
The company has also raised its 2017 expectations for cash from operations. Lockheed Martin projects to generate more than $6 billion cash from operations, compared to earlier projection of more than $5.7 billion.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been five revisions higher for the current quarter compared to one lower.
At this time, Lockheed Martin's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
While estimates have been broadly trending upward, the magnitude of these revisions is net zero. The stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.
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Why Is Lockheed Martin (LMT) Up 3.6% Since the Last Earnings Report?
A month has gone by since the last earnings report for Lockheed Martin Corporation (LMT - Free Report) . Shares have added about 3.6% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Lockheed Martin Beats on Q1 Earnings, Backlog Drops
Lockheed Martin reported first-quarter 2017 earnings from continuing operations of $3 per share, beating the Zacks Consensus Estimate of $2.76 by 8.7%. Earnings came in line with the year-ago period’s bottom line figure.
Operational Highlights
In the reported quarter, total revenue came in at $11.06 billion, missing the Zacks Consensus Estimate of $11.26 billion by 1.8%.
However, the company’s revenues increased 6.6% from $10.37 billion a year ago. Notably, all segments registered year-over-year growth in sales.
Backlog
Lockheed Martin ended the first quarter (on Mar 26, 2017) with $93.5 billion in backlog, down 2.8% from $96.2 billion at 2016-end. Of this, the Aeronautics segment accounted for $32 billion while Rotary and Mission Systems contributed $27.5 billion. Also, $19.5 billion came from Space Systems and $14.5 billion from Missiles and Fire Control.
Segmental Performance
Aeronautics: Sales increased 8% year over year to $4.1 billion, driven by higher net sales for the F-35 as well as F-16 programs.
Operating profit also advanced 4% year over year to $436 million, while operating margin dropped 50 basis points (bps) to 10.6%.
Missiles and Fire Control: Quarterly sales improved 4% year over year to $1.5 billion due to higher sales for fire control programs as well as air and missile defense programs.
Operating profit dropped 0.9% year over year to $219 million and operating margin contracted 70 bps to 14.7%.
Rotary and Mission Systems: Quarterly sales of $3.1 billion increased 3% from the prior-year quarter on higher revenues from Sikorsky.
Operating profit declined 53% year over year to $108 million, while operating margin contracted 410 bps to 3.5%.
Space Systems: Sales increased 11% year over year to about $2.4 billion in the first quarter, driven by sales improvement owing to the company’s increased interest in Atomic Weapons Establishment Venture.
Operating profit increased 18% to $288 million while operating margin improved 70 bps to 12.2% in the quarter.
Financial Condition
Cash and cash equivalents were $2.22 billion as of Mar 26, 2017, compared with $1.84 billion at the end of 2016. Long-term debt was $14.28 billion, almost in line with the 2016-end level.
Cash from operations at the end of the first quarter remained flat at $1.67 billion, compared to 2016-end level.
During the quarter, the company repurchased 1.9 million shares for $500 million compared with the buyback of 2.4 million shares for $501 million a year ago. The company paid dividends worth $544 million to its shareholders, compared to the year ago period’s level of $533 million.
Guidance
For 2017, Lockheed Martin has revised its financial guidance. The company expects to generate revenues in the range of $49.5–$50.7 billion, higher than the earlier provided projection of $49.4–$50.6 billion.
On the bottom-line front, the company now expects its earnings per share to be in the range of $12.15–$12.45 during 2017, lower than the earlier announced guidance of $12.25–$12.55.
The company has also raised its 2017 expectations for cash from operations. Lockheed Martin projects to generate more than $6 billion cash from operations, compared to earlier projection of more than $5.7 billion.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There have been five revisions higher for the current quarter compared to one lower.
Lockheed Martin Corporation Price and Consensus
Lockheed Martin Corporation Price and Consensus | Lockheed Martin Corporation Quote
VGM Scores
At this time, Lockheed Martin's stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
While estimates have been broadly trending upward, the magnitude of these revisions is net zero. The stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.