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Lockheed Q2 Earnings on the Horizon: Buy or Sell Ahead of Results?
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Key Takeaways
LMT is expected to report Q2 revenues of $18.57 billion, up 2.5% from the prior-year quarter's figure.
All four segments are projected to post sales growth, led by gains in Aeronautics and Missiles units.
LMT stock has dropped 4.1% in six months, underperforming its aerospace-defense industry peers.
Lockheed Martin Corporation ((LMT - Free Report) ) is scheduled to release second-quarter 2025 results on July 22, before the opening bell.
The Zacks Consensus Estimate for LMT’s revenues is pegged at $18.57 billion, implying a 2.5% improvement from the year-ago quarter's figure. The consensus mark for earnings is pegged at $6.52 per share, indicating an 8.3% decline from $7.11 in the prior-year quarter. The bottom-line estimate has also gone down 1.4% in the past 60 days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Image Source: Zacks Investment Research
LMT, America’s largest defense contractor, has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 11.75%.
Image Source: Zacks Investment Research
Earnings Whispers for LMT
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 chances of an earnings beat, which is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
An upbeat sales performance from each of LMT’s four business segments is likely to have had a favorable impact on its second-quarter top-line performance.
Aeronautics to Post Solid 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 impressive second-quarter results.
Higher sales volume from increased production for the F-35 jet program is likely to have bolstered this segment’s top line.
The Zacks Consensus Estimate for the Aeronautics unit’s second-quarter revenues is pegged at $7,339.9 million, indicating a 0.9% rise from the prior-year period’s figure.
Rising Projections From Other Segments
The remaining three segments are also projected to have delivered robust performance in the to-be-reported quarter.
Higher sales volume from commercial civil space programs driven by lunar program lifecycles is likely to have bolstered the Space segment’s top line.
The Zacks Consensus Estimate for the segment’s revenues is pinned at $3,227.6 million, indicating 1% growth from the prior-year quarter’s number.
A higher sales volume, resulting from the production ramp-up of missile programs including the Joint Air to Surface Standoff Missile, Long Range Anti-Ship Missile and precision fires program, is likely to have benefited LMT’s Missiles and Fire Control (MFC) segment’s quarterly sales performance.
The Zacks Consensus Estimate for MFC’s second-quarter revenues is currently pegged at $3,344.3 million, indicating 7.8% growth from the top line recorded a year ago.
The production ramp-up of the CH-53K and Black Hawk helicopter programs within the Sikorsky unit, along with higher sales volume from the Canadian Surface Combatant and radar programs within the integrated Warfare systems and sensors business, is likely to have bolstered the Rotary and Mission Systems (RMS) segment’s sales.
The Zacks Consensus Estimate for the RMS unit’s second-quarter revenues is currently pegged at $4,657.3 million, indicating 2.4% growth from the top line recorded a year ago.
Outlook for LMT’s Q2 Earnings
Impressive sales performance from LMT's major business segments is likely to have boosted its overall earnings performance in the second quarter.
However, lower equity earnings from United Launch Alliance (ULA) owing to lower-than-expected ULA launches in the second quarter are likely to have hurt the company’s bottom line.
Also, Lockheed delivered 72 F-35 jets to the U.S. government in May 2025, after several months of delay due to late software improvements, per a Bloomberg News report. Although these deliveries are expected to have boosted LMT’s second-quarter cash flows to some extent, the cost overruns and withheld payments associated with the delays—especially related to the TR-3 software upgrade—in prior quarters are likely to have weighed on its earnings.
Price Performance & Valuation
Lockheed’s shares have exhibited a downward trend, losing a notable percentage over the past six months. Specifically, the stock has lost 4.1%, underperforming the Zacks aerospace-defense industry’s growth of 21.3%.
Image Source: Zacks Investment Research
On the contrary, other notable stocks from the same industry have rallied in the past six months and comfortably outpaced the industry’s performance. Shares of RTX Corporation ((RTX - Free Report) ) and Huntington Ingalls Industries ((HII - Free Report) ) have risen 22.7% and 25.3%, respectively, in the past six months.
From a valuation perspective, LMT is trading at a discount when compared with its industry. Currently, it is trading at 16.43X forward 12-month earnings multiple, which is lower than its industry’s forward price/earnings multiple of 28.02X. However, its five-year median is 16.21X. So, the company’s valuation looks stretched when compared with its five-year range.
Image Source: Zacks Investment Research
Its industry peers are also currently trading at a discount or in line with the industry. While the forward 12-month price/earnings multiple for RTX is 23.44X, the same for Huntington is 16.42X.
Investment Thesis
Rising global tensions have led many countries to significantly boost their defense capabilities. This trend has benefited defense companies like Lockheed, RTX and Huntington through strong contract wins. As a result, Lockheed's second-quarter 2025 results are likely to show solid growth in its order backlog.
Backed by its solid top-line prospects, the company has been offering notable rewards to its shareholders. Impressively, LMT’s dividend yield of 2.79% outpaces that of the S&P 500 (1.18%).
However, LMT’s elevated leverage remains a cause of concern for its investors, as evident from its long-term debt-to-capital ratio, which came in quite higher than that of its peer group.
Image Source: Zacks Investment Research
Should You Buy LMT Stock Before Q2 Earnings Release?
Lockheed might disappoint with its second-quarter results, considering its negative Earnings ESP. Considering this as well as the stock’s poor price performance and elevated leverage, existing investors may consider reducing exposure to Lockheed ahead of next Tuesday.
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Lockheed Q2 Earnings on the Horizon: Buy or Sell Ahead of Results?
Key Takeaways
Lockheed Martin Corporation ((LMT - Free Report) ) is scheduled to release second-quarter 2025 results on July 22, before the opening bell.
The Zacks Consensus Estimate for LMT’s revenues is pegged at $18.57 billion, implying a 2.5% improvement from the year-ago quarter's figure. The consensus mark for earnings is pegged at $6.52 per share, indicating an 8.3% decline from $7.11 in the prior-year quarter. The bottom-line estimate has also gone down 1.4% in the past 60 days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Image Source: Zacks Investment Research
LMT, America’s largest defense contractor, has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 11.75%.
Image Source: Zacks Investment Research
Earnings Whispers for LMT
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 chances of an earnings beat, which is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Lockheed currently has a Zacks Rank #4 (Sell) and an Earnings ESP of -1.21%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Shape LMT’s Q2 Results
An upbeat sales performance from each of LMT’s four business segments is likely to have had a favorable impact on its second-quarter top-line performance.
Aeronautics to Post Solid 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 impressive second-quarter results.
Higher sales volume from increased production for the F-35 jet program is likely to have bolstered this segment’s top line.
The Zacks Consensus Estimate for the Aeronautics unit’s second-quarter revenues is pegged at $7,339.9 million, indicating a 0.9% rise from the prior-year period’s figure.
Rising Projections From Other Segments
The remaining three segments are also projected to have delivered robust performance in the to-be-reported quarter.
Higher sales volume from commercial civil space programs driven by lunar program lifecycles is likely to have bolstered the Space segment’s top line.
The Zacks Consensus Estimate for the segment’s revenues is pinned at $3,227.6 million, indicating 1% growth from the prior-year quarter’s number.
A higher sales volume, resulting from the production ramp-up of missile programs including the Joint Air to Surface Standoff Missile, Long Range Anti-Ship Missile and precision fires program, is likely to have benefited LMT’s Missiles and Fire Control (MFC) segment’s quarterly sales performance.
The Zacks Consensus Estimate for MFC’s second-quarter revenues is currently pegged at $3,344.3 million, indicating 7.8% growth from the top line recorded a year ago.
The production ramp-up of the CH-53K and Black Hawk helicopter programs within the Sikorsky unit, along with higher sales volume from the Canadian Surface Combatant and radar programs within the integrated Warfare systems and sensors business, is likely to have bolstered the Rotary and Mission Systems (RMS) segment’s sales.
The Zacks Consensus Estimate for the RMS unit’s second-quarter revenues is currently pegged at $4,657.3 million, indicating 2.4% growth from the top line recorded a year ago.
Outlook for LMT’s Q2 Earnings
Impressive sales performance from LMT's major business segments is likely to have boosted its overall earnings performance in the second quarter.
However, lower equity earnings from United Launch Alliance (ULA) owing to lower-than-expected ULA launches in the second quarter are likely to have hurt the company’s bottom line.
Also, Lockheed delivered 72 F-35 jets to the U.S. government in May 2025, after several months of delay due to late software improvements, per a Bloomberg News report. Although these deliveries are expected to have boosted LMT’s second-quarter cash flows to some extent, the cost overruns and withheld payments associated with the delays—especially related to the TR-3 software upgrade—in prior quarters are likely to have weighed on its earnings.
Price Performance & Valuation
Lockheed’s shares have exhibited a downward trend, losing a notable percentage over the past six months. Specifically, the stock has lost 4.1%, underperforming the Zacks aerospace-defense industry’s growth of 21.3%.
Image Source: Zacks Investment Research
On the contrary, other notable stocks from the same industry have rallied in the past six months and comfortably outpaced the industry’s performance. Shares of RTX Corporation ((RTX - Free Report) ) and Huntington Ingalls Industries ((HII - Free Report) ) have risen 22.7% and 25.3%, respectively, in the past six months.
From a valuation perspective, LMT is trading at a discount when compared with its industry. Currently, it is trading at 16.43X forward 12-month earnings multiple, which is lower than its industry’s forward price/earnings multiple of 28.02X. However, its five-year median is 16.21X. So, the company’s valuation looks stretched when compared with its five-year range.
Image Source: Zacks Investment Research
Its industry peers are also currently trading at a discount or in line with the industry. While the forward 12-month price/earnings multiple for RTX is 23.44X, the same for Huntington is 16.42X.
Investment Thesis
Rising global tensions have led many countries to significantly boost their defense capabilities. This trend has benefited defense companies like Lockheed, RTX and Huntington through strong contract wins. As a result, Lockheed's second-quarter 2025 results are likely to show solid growth in its order backlog.
Backed by its solid top-line prospects, the company has been offering notable rewards to its shareholders. Impressively, LMT’s dividend yield of 2.79% outpaces that of the S&P 500 (1.18%).
However, LMT’s elevated leverage remains a cause of concern for its investors, as evident from its long-term debt-to-capital ratio, which came in quite higher than that of its peer group.
Image Source: Zacks Investment Research
Should You Buy LMT Stock Before Q2 Earnings Release?
Lockheed might disappoint with its second-quarter results, considering its negative Earnings ESP. Considering this as well as the stock’s poor price performance and elevated leverage, existing investors may consider reducing exposure to Lockheed ahead of next Tuesday.