We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Lockheed (LMT) Down 7.6% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for Lockheed Martin (LMT - Free Report) . Shares have lost about 7.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Lockheed due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Lockheed Martin Beats on Q4 Earnings, Sales Top Estimates
Lockheed Martin reported fourth-quarter 2019 earnings of $5.29 per share, which surpassed the Zacks Consensus Estimate of $4.99 by 6%. The bottom line also improved 20.5% from $4.39 registered in the year-ago quarter. This year-over-year upside can be attributed to solid sales and operating profit growth.
For 2019, earnings were $21.95 per share, which surged 24.8% from $17.59 in the year-ago quarter. Moreover, full-year earnings figure exceeded the Zacks Consensus Estimate of $21.64 by 1.4%.
Operational Highlights
In the reported quarter, net sales amounted to $15.88 billion, which outshined the Zacks Consensus Estimate of $15.28 billion by 3.9%. The reported figure also increased 10.2% from $14.41 billion recorded a year ago. Notably, all the segments registered year-over-year growth in sales during the fourth quarter.
The company recorded operating profit of $1.64 billion compared with the year-ago quarter’s figure of $1.51 billion.
In 2019, total revenues increased 11.3% year over year to $59.81 billion. Full-year revenues surpassed the Zacks Consensus Estimate of $59.19 billion by 1%.
Backlog
Lockheed Martin ended the fourth quarter (on Dec 31, 2019) with $144 billion in backlog, up 4.8% from $137.4 billion at the end of fourth-quarter 2019. Of this, the Aeronautics segment accounted for $55.6 billion, while Rotary and Mission Systems contributed $34.3 billion. While Space Systems accounted for $28.3 billion, Missiles and Fire Control segment contributed $25.8 billion.
Segmental Performance
Aeronautics: Sales increased 8.5% year over year to $6.38 billion, primarily driven by higher net sales from the F-35 program owing to increased volume on sustainment and development contracts. Also, higher sales from classified programs contributed to this segment’s top-line growth.
While operating profit improved 8.5% year over year to $679 million, operating margin remained flat at 10.6%.
Missiles and Fire Control: Quarterly sales increased 14.1% year over year to $2.77 billion owing to higher sales from tactical and strike missiles programs. Also, higher sales from integrated air and missile defense programs along with increased sensors and global sustainment programs contributed to this unit’s top-line growth.
While operating profit declined 7.45% year over year to $348 million, operating margin contracted 290 bps to 12.6%.
Rotary and Mission Systems: Quarterly sales of $3.89 billion improved 7.6% from the prior-year quarter on account of higher net sales for training and logistics (TLS) programs, increased sales for C6ISR programs and higher sales for integrated warfare systems and sensors (IWSS) programs.
Operating profit increased 22.1% year over year to $353 million, while operating margin improved 110 bps to 9.1%.
Space Systems: Sales improved 14% year over year to about $2.84 billion in the fourth quarter. The uptick was driven by higher net sales from government satellite programs, Global Positioning System (GPS) III as well as strategic and missile defense programs.
Operating profit also increased 16% to $260 million, while operating margin remained improved 20 basis points to 9.2% in the reported quarter.
Financial Condition
Lockheed Martin’s cash and cash equivalents totaled $1.51 billion as of Dec 31, 2019, compared with $0.77 billion at the end of 2018. Long-term debt was $11.4 billion, lower than the prior year-end level of $12.60 billion.
Cash from operations at the end of fourth-quarter 2019 amounted to $7.31 billion compared with $3.14 billion a year ago.
During the reported quarter, the company repurchased 1.3 million shares for $490 million compared with 2.25 million shares for $666 million a year ago.
Lockheed Martin paid out dividends worth $675 million to its shareholders in the fourth-quarter compared with the year-ago figure of $622 million.
Guidance
Lockheed Martin issued its financial guidance for full year 2020. The company expects to generate revenues of $62.75-$64.25 billion. On the bottom-line front, it expects to deliver earnings per share in the $23.65- $23.95 band.
The company also expects to generate cash from operations of more than $7.6 billion during the year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -5.15% due to these changes.
VGM Scores
At this time, Lockheed has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Lockheed has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Lockheed (LMT) Down 7.6% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Lockheed Martin (LMT - Free Report) . Shares have lost about 7.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Lockheed due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Lockheed Martin Beats on Q4 Earnings, Sales Top Estimates
Lockheed Martin reported fourth-quarter 2019 earnings of $5.29 per share, which surpassed the Zacks Consensus Estimate of $4.99 by 6%. The bottom line also improved 20.5% from $4.39 registered in the year-ago quarter. This year-over-year upside can be attributed to solid sales and operating profit growth.
For 2019, earnings were $21.95 per share, which surged 24.8% from $17.59 in the year-ago quarter. Moreover, full-year earnings figure exceeded the Zacks Consensus Estimate of $21.64 by 1.4%.
Operational Highlights
In the reported quarter, net sales amounted to $15.88 billion, which outshined the Zacks Consensus Estimate of $15.28 billion by 3.9%. The reported figure also increased 10.2% from $14.41 billion recorded a year ago. Notably, all the segments registered year-over-year growth in sales during the fourth quarter.
The company recorded operating profit of $1.64 billion compared with the year-ago quarter’s figure of $1.51 billion.
In 2019, total revenues increased 11.3% year over year to $59.81 billion. Full-year revenues surpassed the Zacks Consensus Estimate of $59.19 billion by 1%.
Backlog
Lockheed Martin ended the fourth quarter (on Dec 31, 2019) with $144 billion in backlog, up 4.8% from $137.4 billion at the end of fourth-quarter 2019. Of this, the Aeronautics segment accounted for $55.6 billion, while Rotary and Mission Systems contributed $34.3 billion. While Space Systems accounted for $28.3 billion, Missiles and Fire Control segment contributed $25.8 billion.
Segmental Performance
Aeronautics: Sales increased 8.5% year over year to $6.38 billion, primarily driven by higher net sales from the F-35 program owing to increased volume on sustainment and development contracts. Also, higher sales from classified programs contributed to this segment’s top-line growth.
While operating profit improved 8.5% year over year to $679 million, operating margin remained flat at 10.6%.
Missiles and Fire Control: Quarterly sales increased 14.1% year over year to $2.77 billion owing to higher sales from tactical and strike missiles programs. Also, higher sales from integrated air and missile defense programs along with increased sensors and global sustainment programs contributed to this unit’s top-line growth.
While operating profit declined 7.45% year over year to $348 million, operating margin contracted 290 bps to 12.6%.
Rotary and Mission Systems: Quarterly sales of $3.89 billion improved 7.6% from the prior-year quarter on account of higher net sales for training and logistics (TLS) programs, increased sales for C6ISR programs and higher sales for integrated warfare systems and sensors (IWSS) programs.
Operating profit increased 22.1% year over year to $353 million, while operating margin improved 110 bps to 9.1%.
Space Systems: Sales improved 14% year over year to about $2.84 billion in the fourth quarter. The uptick was driven by higher net sales from government satellite programs, Global Positioning System (GPS) III as well as strategic and missile defense programs.
Operating profit also increased 16% to $260 million, while operating margin remained improved 20 basis points to 9.2% in the reported quarter.
Financial Condition
Lockheed Martin’s cash and cash equivalents totaled $1.51 billion as of Dec 31, 2019, compared with $0.77 billion at the end of 2018. Long-term debt was $11.4 billion, lower than the prior year-end level of $12.60 billion.
Cash from operations at the end of fourth-quarter 2019 amounted to $7.31 billion compared with $3.14 billion a year ago.
During the reported quarter, the company repurchased 1.3 million shares for $490 million compared with 2.25 million shares for $666 million a year ago.
Lockheed Martin paid out dividends worth $675 million to its shareholders in the fourth-quarter compared with the year-ago figure of $622 million.
Guidance
Lockheed Martin issued its financial guidance for full year 2020. The company expects to generate revenues of $62.75-$64.25 billion. On the bottom-line front, it expects to deliver earnings per share in the $23.65- $23.95 band.
The company also expects to generate cash from operations of more than $7.6 billion during the year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -5.15% due to these changes.
VGM Scores
At this time, Lockheed has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, Lockheed has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.