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Will Higher Jet Deliveries Aid Lockheed's (LMT) Q2 Earnings?
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Lockheed Martin Corporation (LMT - Free Report) is slated to release second-quarter 2023 results on Jul 18, before the opening bell.
The company delivered an average earnings surprise of 7.46% in the last four quarters. Higher sales volume from two major segments, along with impressive delivery numbers, is likely to have benefited LMT’s second-quarter performance.
Let's see how things have shaped up prior to the announcement.
Aeronautics & Space to Post Impressive Sales
The Aeronautics segment, which primarily manufactures advanced, combat-proven jets, and contributes almost 40% to the company’s top line, is likely to deliver unimpressive results in the to-be-reported quarter.
Lockheed Martin Corporation Price and EPS Surprise
Increased volume from classified programs and F-16 jets is expected to have boosted the segment’s performance. However, lower F-35 deliveries due to software maturation with the Tech Refresh 3 program and hardware delivery timing might have partly impacted this business unit’s overall sales.
The Zacks Consensus Estimate for Aeronautics unit’s second-quarter revenues is pegged at $6,374 million, indicating an 8.7% improvement from the prior-year period’s reported figure.
Continued ramp-up in the next-generation interceptor as well as classified program is expected to have benefited the Space business segment’s second-quarter performance. Favorable program lifecycle timing on Orion spacecraft might have also aided this unit’s sales growth.
The Zacks Consensus Estimate for the segment’s revenues is pinned at $2,840 million, indicating 0.5% growth from the prior-year quarter’s reported number.
Impact of MFC & RMS Performance
Lockheed’s Missiles and Fire Control (MFC) segment provides critical missile defense support to the United States and foreign allies. Within this unit, higher sales volume from integrated air and missile defense might have been outweighed by lower volume from tactical and strike missiles as well as sensors and global sustainment.
The Zacks Consensus Estimate for MFC’s second-quarter revenues is currently pegged at $2,733 million, indicating a 0.5% decline from the year-ago quarter’s reported figure.
Lower C6ISR and Black Hawk volume at Sikorsky might have had hurt the Rotary and Mission Systems (RMS) segment’s sales in the to-be-reported quarter.
The Zacks Consensus Estimate for the RMS segment’s second-quarter revenues is currently pegged at $3,9456 million, indicating a 1.4% decline from that registered in the prior-year quarter.
Impressive Delivery Projections
For manufacturing companies like Lockheed, successful delivery of its manufactured goods indicates solid revenue generation. To this end, we notice that our forecast estimates LMT to have delivered 76 jets in the second quarter, which indicates year-over-year growth of 6.5%.
Q2 Expectations
The anticipated sales improvement in LMT’s two major segments, which together account for almost 58% of the company’s total revenues, might have outweighed the sales deterioration expected from the other two segments. This, along with solid delivery projections, is likely to have boosted Lockheed’s overall sales performance.
The Zacks Consensus Estimate for the company’s second-quarter revenues is pegged at $15.86 billion, indicating a 2.7% increase from the year-ago quarter’s reported number.
Such a solid sales performance, along with lower share count, is expected to have bolstered LMT’s earnings.
The Zacks Consensus Estimate for the defense giant’s second-quarter earnings is pinned at $6.43 per share.
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 as you will see below.
LMT has an Earnings ESP of -0.48% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Below are three defense stocks that have the right combination of elements to post an earnings beat this time around.
Huntington Ingalls delivered a four-quarter average earnings surprise of 8.09%. The consensus estimate for earnings is pegged at $3.14 per share, while that for sales is pinned at $2.73 billion.
L3Harris Technologies (LHX - Free Report) is scheduled to release its second-quarter results on Jul 26. LHX has an Earnings ESP of +0.99% and a Zacks Rank #2.
L3Harris delivered a four-quarter average negative earnings surprise of 0.37%. The Zacks Consensus Estimate for LHX’s earnings is pegged at $2.91 per share, while that for sales is pinned at $4.34 billion.
Embraer SA (ERJ - Free Report) is expected to report second-quarter results soon. ERJ has an Earnings ESP of +25% and a Zacks Rank #3.
Embraer delivered a four-quarter average negative earnings surprise of 253.33%. The consensus mark for ERJ’s earnings is pegged at 12 cents per share, while that for sales is pinned at $1.16 billion.
Image: Bigstock
Will Higher Jet Deliveries Aid Lockheed's (LMT) Q2 Earnings?
Lockheed Martin Corporation (LMT - Free Report) is slated to release second-quarter 2023 results on Jul 18, before the opening bell.
The company delivered an average earnings surprise of 7.46% in the last four quarters. Higher sales volume from two major segments, along with impressive delivery numbers, is likely to have benefited LMT’s second-quarter performance.
Let's see how things have shaped up prior to the announcement.
Aeronautics & Space to Post Impressive Sales
The Aeronautics segment, which primarily manufactures advanced, combat-proven jets, and contributes almost 40% to the company’s top line, is likely to deliver unimpressive results in the to-be-reported quarter.
Lockheed Martin Corporation Price and EPS Surprise
Lockheed Martin Corporation price-eps-surprise | Lockheed Martin Corporation Quote
Increased volume from classified programs and F-16 jets is expected to have boosted the segment’s performance. However, lower F-35 deliveries due to software maturation with the Tech Refresh 3 program and hardware delivery timing might have partly impacted this business unit’s overall sales.
The Zacks Consensus Estimate for Aeronautics unit’s second-quarter revenues is pegged at $6,374 million, indicating an 8.7% improvement from the prior-year period’s reported figure.
Continued ramp-up in the next-generation interceptor as well as classified program is expected to have benefited the Space business segment’s second-quarter performance. Favorable program lifecycle timing on Orion spacecraft might have also aided this unit’s sales growth.
The Zacks Consensus Estimate for the segment’s revenues is pinned at $2,840 million, indicating 0.5% growth from the prior-year quarter’s reported number.
Impact of MFC & RMS Performance
Lockheed’s Missiles and Fire Control (MFC) segment provides critical missile defense support to the United States and foreign allies. Within this unit, higher sales volume from integrated air and missile defense might have been outweighed by lower volume from tactical and strike missiles as well as sensors and global sustainment.
The Zacks Consensus Estimate for MFC’s second-quarter revenues is currently pegged at $2,733 million, indicating a 0.5% decline from the year-ago quarter’s reported figure.
Lower C6ISR and Black Hawk volume at Sikorsky might have had hurt the Rotary and Mission Systems (RMS) segment’s sales in the to-be-reported quarter.
The Zacks Consensus Estimate for the RMS segment’s second-quarter revenues is currently pegged at $3,9456 million, indicating a 1.4% decline from that registered in the prior-year quarter.
Impressive Delivery Projections
For manufacturing companies like Lockheed, successful delivery of its manufactured goods indicates solid revenue generation. To this end, we notice that our forecast estimates LMT to have delivered 76 jets in the second quarter, which indicates year-over-year growth of 6.5%.
Q2 Expectations
The anticipated sales improvement in LMT’s two major segments, which together account for almost 58% of the company’s total revenues, might have outweighed the sales deterioration expected from the other two segments. This, along with solid delivery projections, is likely to have boosted Lockheed’s overall sales performance.
The Zacks Consensus Estimate for the company’s second-quarter revenues is pegged at $15.86 billion, indicating a 2.7% increase from the year-ago quarter’s reported number.
Such a solid sales performance, along with lower share count, is expected to have bolstered LMT’s earnings.
The Zacks Consensus Estimate for the defense giant’s second-quarter earnings is pinned at $6.43 per share.
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 as you will see below.
LMT has an Earnings ESP of -0.48% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Below are three defense stocks that have the right combination of elements to post an earnings beat this time around.
Huntington Ingalls Industries (HII - Free Report) is expected to release its second-quarter results on Aug 3. HII has an Earnings ESP of +2.31% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Huntington Ingalls delivered a four-quarter average earnings surprise of 8.09%. The consensus estimate for earnings is pegged at $3.14 per share, while that for sales is pinned at $2.73 billion.
L3Harris Technologies (LHX - Free Report) is scheduled to release its second-quarter results on Jul 26. LHX has an Earnings ESP of +0.99% and a Zacks Rank #2.
L3Harris delivered a four-quarter average negative earnings surprise of 0.37%. The Zacks Consensus Estimate for LHX’s earnings is pegged at $2.91 per share, while that for sales is pinned at $4.34 billion.
Embraer SA (ERJ - Free Report) is expected to report second-quarter results soon. ERJ has an Earnings ESP of +25% and a Zacks Rank #3.
Embraer delivered a four-quarter average negative earnings surprise of 253.33%. The consensus mark for ERJ’s earnings is pegged at 12 cents per share, while that for sales is pinned at $1.16 billion.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.