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Lockheed Martin (LMT) Q3 Earnings Top Estimates, Sales Miss
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Lockheed Martin Corporation (LMT - Free Report) reported third-quarter 2022 adjusted earnings of $6.87 per share, which surpassed the Zacks Consensus Estimate of $6.58 by 4.4%. The bottom line also improved 4.1% year over year.
The company reported GAAP earnings of $6.71 for the third quarter of 2022, compared with $2.21 in the prior-year quarter.
Our model projected adjusted earnings of $6.71 per share for the third quarter.
Operational Highlights
In the reported quarter, net sales amounted to $16.58 billion, which missed the Zacks Consensus Estimate of $16.82 billion by 1.4%. The top line, however, rose 3.5% from $16.03 billion reported in the year-ago quarter.
Third-quarter revenues came in below our estimate of $16.79 billion.
Lockheed Martin Corporation Price, Consensus and EPS Surprise
Lockheed Martin ended the third quarter of 2022 (on Sep 25, 2022), with $139.71 billion in backlog compared with $134.64 billion at the end of second-quarter 2022. Of this, the Aeronautics segment accounted for $48.16 billion, while Rotary and Mission Systems contributed $35.03 billion. Meanwhile, Space Systems and the Missiles and Fire Control segments contributed $28.45 billion and $28.08 billion, respectively.
Segmental Performance
Aeronautics: Sales improved 8% year over year to $7.09 billion, primarily driven by higher sales from the F-35 program and classified contracts.
The segment’s operating profit improved 6% year over year to $759 million. The operating margin contracted 20 basis points (bps) to 10.7%.
Missiles and Fire Control: Quarterly sales rose 2% year over year to $2.83 billion due to higher sales from integrated air and missile defense programs.
The segment’s operating profit dropped 8% year over year to $382 million, while the operating margin contracted 140 bps to 13.5%.
Space Systems: Sales increased 7% year over year to $2.88 billion in the third quarter on account of higher sales from strategic and missile defense programs.
The segment’s operating profit increased 14% to $301 million. The operating margin expanded 60 bps to 10.4% in the quarter under review.
Rotary and Mission Systems: Quarterly revenues declined 5% on a year-over-year basis to $3.78 billion. The decrease was primarily due to lower sales for various C6ISR programs and Sikorsky helicopter programs.
The segment’s operating profit dropped 10% to $414 million in the third quarter. The operating margin contracted 60 bps to 10.9% in the reported quarter.
Financial Condition
Lockheed Martin’s cash and cash equivalents totaled $2.43 billion at the end of third-quarter 2022 compared with $3.60 billion at the end of 2021.
Cash from operating activities at the end of third-quarter 2022 amounted to $5.87 billion compared with $4.95 billion a year ago.
Guidance
Lockheed Martin reiterated its financial guidance for 2022.
The company continues to expect 2022 revenues to be $65.25 billion. The Zacks Consensus Estimate for full-year revenues, which is pegged at $65.30 billion, is slightly higher than the company’s guidance.
Earnings per share are still anticipated to be $21.55 for 2022. The Zacks Consensus Estimate for the company’s full-year earnings of $21.65 per share is higher than LMT’s guidance.
Also, the company maintained its free cash flow guidance at $6 billion for 2022.
Spirit AeroSystems (SPR - Free Report) is scheduled to release its third-quarter results on Nov 3. It holds a Zacks Rank #3.
The Zacks Consensus Estimate for SPR’s third-quarter earnings, pegged at a loss of 39 cents, has remained the same over the past seven days. The stock boasts a long-term earnings growth rate of 8.5%.
TransDigm Group (TDG - Free Report) is going to release its third-quarter results soon. It holds a Zacks Rank #3.
The Zacks Consensus Estimate for TransDigm’s earnings, pegged at $5.03, has improved 0.6% over the past 30 days. TDG boasts a long-term earnings growth rate of 18.9%.
Spire (SPIR - Free Report) is slated to report third-quarter results on Nov 9. It holds a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for SPIR’s third-quarter earnings, pegged at a loss of 10 cents, has remained unchanged over the past seven days. SPIR boasts a long-term earnings growth rate of 7.9%.
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Lockheed Martin (LMT) Q3 Earnings Top Estimates, Sales Miss
Lockheed Martin Corporation (LMT - Free Report) reported third-quarter 2022 adjusted earnings of $6.87 per share, which surpassed the Zacks Consensus Estimate of $6.58 by 4.4%. The bottom line also improved 4.1% year over year.
The company reported GAAP earnings of $6.71 for the third quarter of 2022, compared with $2.21 in the prior-year quarter.
Our model projected adjusted earnings of $6.71 per share for the third quarter.
Operational Highlights
In the reported quarter, net sales amounted to $16.58 billion, which missed the Zacks Consensus Estimate of $16.82 billion by 1.4%. The top line, however, rose 3.5% from $16.03 billion reported in the year-ago quarter.
Third-quarter revenues came in below our estimate of $16.79 billion.
Lockheed Martin Corporation Price, Consensus and EPS Surprise
Lockheed Martin Corporation price-consensus-eps-surprise-chart | Lockheed Martin Corporation Quote
Backlog
Lockheed Martin ended the third quarter of 2022 (on Sep 25, 2022), with $139.71 billion in backlog compared with $134.64 billion at the end of second-quarter 2022. Of this, the Aeronautics segment accounted for $48.16 billion, while Rotary and Mission Systems contributed $35.03 billion. Meanwhile, Space Systems and the Missiles and Fire Control segments contributed $28.45 billion and $28.08 billion, respectively.
Segmental Performance
Aeronautics: Sales improved 8% year over year to $7.09 billion, primarily driven by higher sales from the F-35 program and classified contracts.
The segment’s operating profit improved 6% year over year to $759 million. The operating margin contracted 20 basis points (bps) to 10.7%.
Missiles and Fire Control: Quarterly sales rose 2% year over year to $2.83 billion due to higher sales from integrated air and missile defense programs.
The segment’s operating profit dropped 8% year over year to $382 million, while the operating margin contracted 140 bps to 13.5%.
Space Systems: Sales increased 7% year over year to $2.88 billion in the third quarter on account of higher sales from strategic and missile defense programs.
The segment’s operating profit increased 14% to $301 million. The operating margin expanded 60 bps to 10.4% in the quarter under review.
Rotary and Mission Systems: Quarterly revenues declined 5% on a year-over-year basis to $3.78 billion. The decrease was primarily due to lower sales for various C6ISR programs and Sikorsky helicopter programs.
The segment’s operating profit dropped 10% to $414 million in the third quarter. The operating margin contracted 60 bps to 10.9% in the reported quarter.
Financial Condition
Lockheed Martin’s cash and cash equivalents totaled $2.43 billion at the end of third-quarter 2022 compared with $3.60 billion at the end of 2021.
Cash from operating activities at the end of third-quarter 2022 amounted to $5.87 billion compared with $4.95 billion a year ago.
Guidance
Lockheed Martin reiterated its financial guidance for 2022.
The company continues to expect 2022 revenues to be $65.25 billion. The Zacks Consensus Estimate for full-year revenues, which is pegged at $65.30 billion, is slightly higher than the company’s guidance.
Earnings per share are still anticipated to be $21.55 for 2022. The Zacks Consensus Estimate for the company’s full-year earnings of $21.65 per share is higher than LMT’s guidance.
Also, the company maintained its free cash flow guidance at $6 billion for 2022.
Zacks Rank
Lockheed Martin currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Q3 Defense Earnings
Spirit AeroSystems (SPR - Free Report) is scheduled to release its third-quarter results on Nov 3. It holds a Zacks Rank #3.
The Zacks Consensus Estimate for SPR’s third-quarter earnings, pegged at a loss of 39 cents, has remained the same over the past seven days. The stock boasts a long-term earnings growth rate of 8.5%.
TransDigm Group (TDG - Free Report) is going to release its third-quarter results soon. It holds a Zacks Rank #3.
The Zacks Consensus Estimate for TransDigm’s earnings, pegged at $5.03, has improved 0.6% over the past 30 days. TDG boasts a long-term earnings growth rate of 18.9%.
Spire (SPIR - Free Report) is slated to report third-quarter results on Nov 9. It holds a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for SPIR’s third-quarter earnings, pegged at a loss of 10 cents, has remained unchanged over the past seven days. SPIR boasts a long-term earnings growth rate of 7.9%.