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Lockheed Martin (LMT) Beats on Q2 Earnings, Raises 18' View
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Pentagon's prime defense contractor, Lockheed Martin Corp. (LMT - Free Report) reported second-quarter 2018 adjusted earnings of $4.31 per share, beating the Zacks Consensus Estimate of $3.89 by 10.8%.
Excluding one-time items, the company reported GAAP earnings of $4.05 per share, which came in 23.5% higher than the year-ago period's bottom-line figure of $3.28.
Operational Highlights
In the reported quarter, total revenues came in at $13.40 billion, which surpassed the Zacks Consensus Estimate of $12.75 billion by 5.1%.
Moreover, the company's revenues increased 6.6% from $12.56 billion a year ago. Notably, all segments registered year-over-year growth in sales, except the Space Segment.
Backlog
Lockheed Martin ended the second quarter (on Jun 24, 2018) with $105 billion in backlog, up a mere 0.2% from $104.8 billion at the end of first-quarter 2018. Of this, the Aeronautics segment accounted for $36.64 billion, while Rotary and Mission Systems contributed $29.1 billion. Also, $20.1 billion came from Space Systems and $19.17 billion from Missiles and Fire Control segment.
Segmental Performance
Aeronautics: Sales increased 8.1% year over year to $5.32 billion, driven by higher net sales from the F-35 and F-22 programs.
Operating profit also advanced 0.9% year over year to $572 million, while operating margin contracted 80 basis points (bps) to 10.7%.
Missiles and Fire Control: Quarterly sales improved 16.9% year over year to $2.09 billion, due to increased volume on classified programs along with air and missile defense programs.
Operating profit increased 10.3% year over year to $279 million and operating margin contracted 80 bps to 13.4%.
Rotary and Mission Systems: Quarterly sales of $3.57 billion increased 4.45% from the prior-year quarter, due to higher sales for integrated warfare systems and sensors (IWSS) programs as well as C4ISR programs.
Operating profit improved 25.8% year over year to $341 million, while operating margin expanded 170 bps to 9.6%.
Space Systems: Sales dropped 0.7% year over year to about $0.24 billion in the second quarter, driven by lower net sales for government satellite programs.
Operating profit increased 7% to $274 million, while operating margin expanded 80 bps to 11.3% in the reported quarter.
Lockheed Martin Corporation Price, Consensus and EPS Surprise
Lockheed Martin’s cash and cash equivalents were $1.18 billion as of Jun 24, 2018 compared with $2.39 billion at the end of the first quarter. Long-term debt was $13.48 billion, almost in line with the first-quarter end level.
Cash from operations at the end of the second quarter was $0.5 billion compared with the first quarter's level of $0.6 billion.
During the quarter, the company repurchased 1 million shares for $310 million compared with the buyback of 1.9 million shares for $500 million a year ago. The company paid dividends worth $570 million to its shareholders compared with the year-ago period's figure of $525 million.
Guidance
For 2018, Lockheed Martin has raised its financial guidance. The company currently expects to generate revenues in the range of $51.6-$53.1 billion, higher than the earlier provided projection of $50.35-$51.85 billion.
On the bottom-line front, the company now expects its earnings per share to be in the range of $16.75-$17.05 during 2018, higher than the earlier-announced guidance range of $15.80-$16.10.
The company has also increased its 2018 expectations for cash from operations. Lockheed Martin continues to expect more than $3.3 billion cash from operations, compared to earlier projections to generate more than $3 billion.
Hexcel Corp. (HXL - Free Report) reported second-quarter 2018 adjusted earnings of 75 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 1.3%.
Textron Inc. (TXT - Free Report) reported second-quarter 2018 earnings from continuing operations of 87 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 24.3%.
AAR Corp. (AIR - Free Report) reported fourth-quarter fiscal 2018 adjusted earnings of 54 cents per share, which surpassed the Zacks Consensus Estimate of 52 cents by 3.9%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Lockheed Martin (LMT) Beats on Q2 Earnings, Raises 18' View
Pentagon's prime defense contractor, Lockheed Martin Corp. (LMT - Free Report) reported second-quarter 2018 adjusted earnings of $4.31 per share, beating the Zacks Consensus Estimate of $3.89 by 10.8%.
Excluding one-time items, the company reported GAAP earnings of $4.05 per share, which came in 23.5% higher than the year-ago period's bottom-line figure of $3.28.
Operational Highlights
In the reported quarter, total revenues came in at $13.40 billion, which surpassed the Zacks Consensus Estimate of $12.75 billion by 5.1%.
Moreover, the company's revenues increased 6.6% from $12.56 billion a year ago. Notably, all segments registered year-over-year growth in sales, except the Space Segment.
Backlog
Lockheed Martin ended the second quarter (on Jun 24, 2018) with $105 billion in backlog, up a mere 0.2% from $104.8 billion at the end of first-quarter 2018. Of this, the Aeronautics segment accounted for $36.64 billion, while Rotary and Mission Systems contributed $29.1 billion. Also, $20.1 billion came from Space Systems and $19.17 billion from Missiles and Fire Control segment.
Segmental Performance
Aeronautics: Sales increased 8.1% year over year to $5.32 billion, driven by higher net sales from the F-35 and F-22 programs.
Operating profit also advanced 0.9% year over year to $572 million, while operating margin contracted 80 basis points (bps) to 10.7%.
Missiles and Fire Control: Quarterly sales improved 16.9% year over year to $2.09 billion, due to increased volume on classified programs along with air and missile defense programs.
Operating profit increased 10.3% year over year to $279 million and operating margin contracted 80 bps to 13.4%.
Rotary and Mission Systems: Quarterly sales of $3.57 billion increased 4.45% from the prior-year quarter, due to higher sales for integrated warfare systems and sensors (IWSS) programs as well as C4ISR programs.
Operating profit improved 25.8% year over year to $341 million, while operating margin expanded 170 bps to 9.6%.
Space Systems: Sales dropped 0.7% year over year to about $0.24 billion in the second quarter, driven by lower net sales for government satellite programs.
Operating profit increased 7% to $274 million, while operating margin expanded 80 bps to 11.3% in the reported quarter.
Lockheed Martin Corporation Price, Consensus and EPS Surprise
Lockheed Martin Corporation Price, Consensus and EPS Surprise | Lockheed Martin Corporation Quote
Financial Condition
Lockheed Martin’s cash and cash equivalents were $1.18 billion as of Jun 24, 2018 compared with $2.39 billion at the end of the first quarter. Long-term debt was $13.48 billion, almost in line with the first-quarter end level.
Cash from operations at the end of the second quarter was $0.5 billion compared with the first quarter's level of $0.6 billion.
During the quarter, the company repurchased 1 million shares for $310 million compared with the buyback of 1.9 million shares for $500 million a year ago. The company paid dividends worth $570 million to its shareholders compared with the year-ago period's figure of $525 million.
Guidance
For 2018, Lockheed Martin has raised its financial guidance. The company currently expects to generate revenues in the range of $51.6-$53.1 billion, higher than the earlier provided projection of $50.35-$51.85 billion.
On the bottom-line front, the company now expects its earnings per share to be in the range of $16.75-$17.05 during 2018, higher than the earlier-announced guidance range of $15.80-$16.10.
The company has also increased its 2018 expectations for cash from operations. Lockheed Martin continues to expect more than $3.3 billion cash from operations, compared to earlier projections to generate more than $3 billion.
Zacks Rank
Lockheed Martin carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Recent Defense Releases
Hexcel Corp. (HXL - Free Report) reported second-quarter 2018 adjusted earnings of 75 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 1.3%.
Textron Inc. (TXT - Free Report) reported second-quarter 2018 earnings from continuing operations of 87 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 24.3%.
AAR Corp. (AIR - Free Report) reported fourth-quarter fiscal 2018 adjusted earnings of 54 cents per share, which surpassed the Zacks Consensus Estimate of 52 cents by 3.9%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave
plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>