We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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 6.4% 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 6.4% 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 catalysts.
Lockheed Beats on Q3 Earnings but Misses Sales, Ups '24 EPS View
Lockheed Martin Corporation reported third-quarter 2024 adjusted earnings of $6.84 per share, which beat the Zacks Consensus Estimate of $6.47 by 5.7%. The bottom line also rose 1% from the year-ago quarter's recorded figure of $6.77.
The company reported GAAP earnings of $6.80 per share compared with $6.73 a year ago.
The year-over-year bottom-line improvement can be attributed to solid sales growth and operating profit increase.
Operational Highlights
Net sales were $17.10 billion, which missed the Zacks Consensus Estimate of $17.28 billion by 1%. The top line, however, increased 1.3% from $16.88 billion reported in the year-ago quarter.
The year-over-year top-line improvement can be attributed to sales growth from Missiles and Fire Control as well as Rotary and Mission Systems segments.
Backlog
LMT’s backlog as of Sept. 30, 2024, was $165.69 billion compared with $158.34 billion at the end of second-quarter 2024.
Our model projected a backlog worth $155.26 billion for the third quarter.
The Aeronautics segment accounted for $50.99 billion of the total backlog amount, while Missiles and Fire Control segment contributed $40.72 billion. The Rotary and Mission Systems segment contributed $37.57 billion, while the Space unit accounted for $36.41 billion.
Segmental Performance
Aeronautics: Sales declined 3.4% year over year to $6.49 billion. This was due to lower sales volume from the F-35 program owing to lower volume on production contracts due to delays in receiving additional contractual authorization and funding.
The segment’s operating profit dropped 1.8% year over year to $659 million. The operating margin, however, expanded 20 basis points (bps) to 10.2%.
Missiles and Fire Control: Quarterly sales improved a solid 8% year over year to $3.18 billion. This was on account of higher sales from tactical and strike missile programs, driven by a production ramp-up of Guided Multiple Launch Rocket Systems and Long Range Anti-Ship Missile programs.
The segment’s operating profit increased 14.6% year over year to $456 million. The operating margin of 14.4% expanded 90 bps from the year-ago level.
Space: The top line decreased 0.8% year over year to $3.08 billion due to lower sales from commercial civil space owing to lower volume from the Orion program.
The segment’s operating profit rose 5% to $272 million. The operating margin expanded 40 bps to 8.8%.
Rotary and Mission Systems: Quarterly revenues improved 6% to $4.37 billion on a year-over-year basis. This was primarily driven by higher net sales from integrated warfare systems and sensor programs. Higher net sales from Sikorsky helicopter programs, driven by higher production volume for CH-53K, Seahawk and Black Hawk programs, also aided this segment’s top line.
Operating profit rose 0.2% to $483 million. The operating margin, however, deteriorated 60 bps to 11.1% in the said time frame.
Financial Condition
Lockheed’s cash and cash equivalents totaled $3.15 billion at the end of third-quarter 2024 compared with $1.44 billion at the end of 2023.
Cash from operating activities amounted to $5.95 billion as of Sept. 29, 2024, compared with $5.56 billion a year ago.
Long-term debt as of Sept. 29, 2024, totaled $19.18 billion, up from $17.29 billion as of Dec. 31, 2023.
2024 Guidance
Lockheed has partially raised its financial guidance for 2024. The company now expects to generate $71.25 billion in revenues for 2024 (compared to the earlier guidance of $70.50-$71.50 billion). The Zacks Consensus Estimate for revenues is pegged at $71.06 billion, which lies below the company’s revised guided range.
LMT currently expects 2024 earnings per share (EPS) to be $26.65, higher than its prior guidance of $26.10-$26.60. The Zacks Consensus Estimate for full-year EPS is pinned at $26.47, lower than the company’s updated guidance.
Lockheed now expects to generate $6.20 billion in free cash flow during 2024 (compared to the previous guidance of $6.00-$6.30 billion).
It still expects capital expenditures of $1.75 billion during the year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Lockheed has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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 these revisions 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 6.4% 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 6.4% 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 catalysts.
Lockheed Beats on Q3 Earnings but Misses Sales, Ups '24 EPS View
Lockheed Martin Corporation reported third-quarter 2024 adjusted earnings of $6.84 per share, which beat the Zacks Consensus Estimate of $6.47 by 5.7%. The bottom line also rose 1% from the year-ago quarter's recorded figure of $6.77.
The company reported GAAP earnings of $6.80 per share compared with $6.73 a year ago.
The year-over-year bottom-line improvement can be attributed to solid sales growth and operating profit increase.
Operational Highlights
Net sales were $17.10 billion, which missed the Zacks Consensus Estimate of $17.28 billion by 1%. The top line, however, increased 1.3% from $16.88 billion reported in the year-ago quarter.
The year-over-year top-line improvement can be attributed to sales growth from Missiles and Fire Control as well as Rotary and Mission Systems segments.
Backlog
LMT’s backlog as of Sept. 30, 2024, was $165.69 billion compared with $158.34 billion at the end of second-quarter 2024.
Our model projected a backlog worth $155.26 billion for the third quarter.
The Aeronautics segment accounted for $50.99 billion of the total backlog amount, while Missiles and Fire Control segment contributed $40.72 billion. The Rotary and Mission Systems segment contributed $37.57 billion, while the Space unit accounted for $36.41 billion.
Segmental Performance
Aeronautics: Sales declined 3.4% year over year to $6.49 billion. This was due to lower sales volume from the F-35 program owing to lower volume on production contracts due to delays in receiving additional contractual authorization and funding.
The segment’s operating profit dropped 1.8% year over year to $659 million. The operating margin, however, expanded 20 basis points (bps) to 10.2%.
Missiles and Fire Control: Quarterly sales improved a solid 8% year over year to $3.18 billion. This was on account of higher sales from tactical and strike missile programs, driven by a production ramp-up of Guided Multiple Launch Rocket Systems and Long Range Anti-Ship Missile programs.
The segment’s operating profit increased 14.6% year over year to $456 million. The operating margin of 14.4% expanded 90 bps from the year-ago level.
Space: The top line decreased 0.8% year over year to $3.08 billion due to lower sales from commercial civil space owing to lower volume from the Orion program.
The segment’s operating profit rose 5% to $272 million. The operating margin expanded 40 bps to 8.8%.
Rotary and Mission Systems: Quarterly revenues improved 6% to $4.37 billion on a year-over-year basis. This was primarily driven by higher net sales from integrated warfare systems and sensor programs. Higher net sales from Sikorsky helicopter programs, driven by higher production volume for CH-53K, Seahawk and Black Hawk programs, also aided this segment’s top line.
Operating profit rose 0.2% to $483 million. The operating margin, however, deteriorated 60 bps to 11.1% in the said time frame.
Financial Condition
Lockheed’s cash and cash equivalents totaled $3.15 billion at the end of third-quarter 2024 compared with $1.44 billion at the end of 2023.
Cash from operating activities amounted to $5.95 billion as of Sept. 29, 2024, compared with $5.56 billion a year ago.
Long-term debt as of Sept. 29, 2024, totaled $19.18 billion, up from $17.29 billion as of Dec. 31, 2023.
2024 Guidance
Lockheed has partially raised its financial guidance for 2024. The company now expects to generate $71.25 billion in revenues for 2024 (compared to the earlier guidance of $70.50-$71.50 billion). The Zacks Consensus Estimate for revenues is pegged at $71.06 billion, which lies below the company’s revised guided range.
LMT currently expects 2024 earnings per share (EPS) to be $26.65, higher than its prior guidance of $26.10-$26.60. The Zacks Consensus Estimate for full-year EPS is pinned at $26.47, lower than the company’s updated guidance.
Lockheed now expects to generate $6.20 billion in free cash flow during 2024 (compared to the previous guidance of $6.00-$6.30 billion).
It still expects capital expenditures of $1.75 billion during the year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Lockheed has a nice Growth Score of B, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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 these revisions 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.