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.
Will Poor Operational Show Hit Lockheed (LMT) in Q3 Earnings?
Read MoreHide Full Article
Lockheed Martin Corporation (LMT - Free Report) is slated to release third-quarter 2021 results on Oct 26, before the opening bell.
Solid sales performance across segments is expected to have generated significant growth for the company in the soon-to-be-reported quarter. However, charges related to the performance issues faced by a few programs might have hurt its earnings growth in the third quarter.
Let's see how things have shaped up prior to this announcement.
Aeronautics a Key Catalyst
The Aeronautics segment, which primarily manufactures advanced, combat-proven jets and comprises almost 40% of the company’s top line, is expected to have once again acted as a major growth catalyst. Lockheed Martin has a history of delivering a significant number of military jets every quarter. We expect a similar trend in the yet-to-be-reported quarter as well which along with solid production volume for the F-35 and F-16 programs is expected to have boosted top-line growth for the Aeronautics business division.
The Zacks Consensus Estimate for this unit’s revenues stands at $7,053 million, indicating a 5.6% improvement from the prior-year reported figure.
Lockheed Martin Corporation Price and EPS Surprise
We expect Lockheed Martin’s Missiles and Fire Control (MFC) segment, which provides critical missile defense support to the United States and foreign allies, to have also delivered a strong operational performance in the soon-to-be-reported quarter.
In particular, increased production volume for tactical and strike missile programs is expected to have boosted the MFC unit’s top-line performance in the third quarter.
The Zacks Consensus Estimate for MFC segment revenues is currently pegged at $3,063 million, implying a 3.1% increase from the year-ago reported figure.
Q3 Expectations
Solid revenue growth in each of the company’s business segments is likely to have boosted Lockheed’s overall top line in the to-be-reported quarter. The Zacks Consensus Estimate for the company’s third-quarter revenues stands at $17.15 billion, indicating a 4% increase from the year-earlier reported figure.
Despite expectations of a strong sales performance in the yet-to-be-reported quarter, a poor operating performance is likely to have weighed on Lockheed's Q3 earnings growth. In particular, the company is expected to have incurred some significant charges related to performance issues in a few programs in its Aeronautics and Rotary and Missions business divisions. This must have hurt its operating profit, thereby dragging down its bottom-line figure in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for the defense giant’s third-quarter earnings is pegged at $2.63 per share, suggesting a decline of 57.9% from the prior-year reported number.
In March 2021, Aerojet Rocketdyne’s shareholders approved its merger agreement with Lockheed, a transaction projected to be completed in the fourth quarter of 2021. We expect Lockheed to provide an update on the progress of this acquisition when it releases third-quarter results.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Lockheed this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
Lockheed has an Earnings ESP of -27.61% and a Zacks Rank #4. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a couple of defense companies you may want to consider, as these have the right combination of elements to post an earnings beat this season:
Transdigm Group (TDG - Free Report) has an Earnings ESP of +2.16% and a Zacks Rank #2.
Image: Bigstock
Will Poor Operational Show Hit Lockheed (LMT) in Q3 Earnings?
Lockheed Martin Corporation (LMT - Free Report) is slated to release third-quarter 2021 results on Oct 26, before the opening bell.
Solid sales performance across segments is expected to have generated significant growth for the company in the soon-to-be-reported quarter. However, charges related to the performance issues faced by a few programs might have hurt its earnings growth in the third quarter.
Let's see how things have shaped up prior to this announcement.
Aeronautics a Key Catalyst
The Aeronautics segment, which primarily manufactures advanced, combat-proven jets and comprises almost 40% of the company’s top line, is expected to have once again acted as a major growth catalyst. Lockheed Martin has a history of delivering a significant number of military jets every quarter. We expect a similar trend in the yet-to-be-reported quarter as well which along with solid production volume for the F-35 and F-16 programs is expected to have boosted top-line growth for the Aeronautics business division.
The Zacks Consensus Estimate for this unit’s revenues stands at $7,053 million, indicating a 5.6% improvement from the prior-year reported figure.
Lockheed Martin Corporation Price and EPS Surprise
Lockheed Martin Corporation price-eps-surprise | Lockheed Martin Corporation Quote
MFC Unit: Another Growth Driver
We expect Lockheed Martin’s Missiles and Fire Control (MFC) segment, which provides critical missile defense support to the United States and foreign allies, to have also delivered a strong operational performance in the soon-to-be-reported quarter.
In particular, increased production volume for tactical and strike missile programs is expected to have boosted the MFC unit’s top-line performance in the third quarter.
The Zacks Consensus Estimate for MFC segment revenues is currently pegged at $3,063 million, implying a 3.1% increase from the year-ago reported figure.
Q3 Expectations
Solid revenue growth in each of the company’s business segments is likely to have boosted Lockheed’s overall top line in the to-be-reported quarter. The Zacks Consensus Estimate for the company’s third-quarter revenues stands at $17.15 billion, indicating a 4% increase from the year-earlier reported figure.
Despite expectations of a strong sales performance in the yet-to-be-reported quarter, a poor operating performance is likely to have weighed on Lockheed's Q3 earnings growth. In particular, the company is expected to have incurred some significant charges related to performance issues in a few programs in its Aeronautics and Rotary and Missions business divisions. This must have hurt its operating profit, thereby dragging down its bottom-line figure in the soon-to-be-reported quarter.
The Zacks Consensus Estimate for the defense giant’s third-quarter earnings is pegged at $2.63 per share, suggesting a decline of 57.9% from the prior-year reported number.
In March 2021, Aerojet Rocketdyne’s shareholders approved its merger agreement with Lockheed, a transaction projected to be completed in the fourth quarter of 2021. We expect Lockheed to provide an update on the progress of this acquisition when it releases third-quarter results.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Lockheed this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.
Lockheed has an Earnings ESP of -27.61% and a Zacks Rank #4. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a couple of defense companies you may want to consider, as these have the right combination of elements to post an earnings beat this season:
Transdigm Group (TDG - Free Report) has an Earnings ESP of +2.16% and a Zacks Rank #2.
CAE Inc (CAE - Free Report) has an Earnings ESP of +9.46% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.