Lockheed Martin (LMT Quick QuoteLMT - Free Report) reported decent second-quarter fiscal 2023 results on Jul 18, 2023. Both earnings and revenues beat the respective Zacks Consensus Estimate.

Shares of Lockheed, which belongs to the Zacks Aerospace - Defense industry, currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term.

Q2 Earnings in Focus

The U.S. weapon maker reported adjusted earnings of $6.73 per share, surpassing Zacks Consensus Estimate of $6.43 by 4.7% in the second quarter of 2023. The bottom line also improved by 6.5% from the year-ago quarter.

The company reported GAAP earnings of $6.63 per share compared with $1.16 in the prior-year period. The company has surpassed consensus EPS estimates in each of the trailing four quarters.

Lockheed Martin exceeded expectations with net sales of $16.69 billion, beating the Zacks Consensus Estimate of $15.86 billion by 5.3%. The 8.1% year-over-year increase from $15.45 billion also showed robust growth.

Geopolitical Tensions to Provide a Boost?

Throughout the year, Lockheed Martin has lagged market's performance. According to Reuters, the company recently raised its annual profit and sales outlook due to strong demand for military equipment fueled by ongoing geopolitical uncertainties. The escalation of tensions in regions like Ukraine and U.S.-China relations have led to a surge in orders for air defense systems, missiles, and other weapons for defense companies in the country.

Lockheed's aeronautics unit, being its largest segment, reported a significant improvement in quarterly sales, increasing by 17.3% year over year to reach $6.88 billion. This growth was primarily attributed to higher production contracts for F-35 jets and increased volume in sustainment contracts for the C-130 program.

Guidance

The world's largest defense contractor has partly raised its financial guidance for 2023. The company now expects revenues of $66.25-$66.75 billion compared with its earlier projection of $65-66 billion. The Zacks Consensus Estimate for full-year revenues is pegged at $65.77 billion, which lies below the company’s guided range.

LMT now expects earnings per share (EPS) in the range of $27.00-$27.20 compared with the prior guidance of $26.60-$26.90. The Zacks Consensus Estimate for the company’s full-year EPS is pegged at $27.06 below the mid-point of the company’s guided range.

ETFs in Focus

Investors looking to invest in the weapon maker can look into the following ETFs, with considerable exposure in the company.

First Trust Indxx Aerospace & Defense ETF (MISL Quick QuoteMISL - Free Report)

First Trust Indxx Aerospace & Defense ETF seeks to closely track the performance of the Indxx US Aerospace & Defense Index. The fund has a basket of 33 securities and has gathered an asset base of $25.74 million. MISL charges an annual fee of 0.60%.

First Trust Indxx Aerospace & Defense ETF has an exposure of 7.29% in LMT and a Zacks ETF Rank #3 (Hold). The fund has returned 4.7% year to date (as of Jul 20).

iShares U.S. Aerospace & Defense ETF (ITA Quick QuoteITA - Free Report)

iShares U.S. Aerospace & Defense ETF seeks to tracks the performance of Dow Jones U.S. Select Aerospace & Defense Index with a basket of 35 securities. The fund has amassed an asset base of $5.79 billion and charges an annual fee of 0.39%.

iShares U.S. Aerospace & Defense ETF has an exposure of 6.29% in LMT and a Zacks ETF Rank #3, along with a Medium risk outlook. The fund has earned 22.77% over the past year and 4.43% year to date (as of Jul 20).

Invesco Aerospace & Defense ETF (PPA Quick QuotePPA - Free Report)

Invesco Aerospace & Defense ETF is based on the SPADE Defense Index. The fund has a basket of 56 securities and an asset base of $1.97 billion. PPA charges an annual fee of 0.61%.

Invesco Aerospace & Defense ETF has an exposure of 6.23% in LMT and a Zacks ETF Rank #2 (Buy), along with a Medium risk outlook. The fund has earned 24.65% over the past year and 8.43% year to date (as of Jul 20).