Lockheed Martin Surges On Upbeat Earnings And 2019 Guidance

Lockheed Martin earnings

Lockheed Martin reported strong first quarter results and raised its full-year outlook on Tuesday, sending its shares up by 5%. The aerospace and defense company posted earnings that crushed Wall Street estimates thanks to higher demand for its fighter jets and missiles. Earnings climbed by 47% from the year-ago period while revenue rose by 22%.

All of Lockheed Martin’s business segments recorded an increase in sales from the year-earlier period with the Missiles and Fire Control segment posting the highest jump. The Maryland-based company is the first major defense company to announce first quarter earnings this week.

Wall Street expects defense companies to post higher earnings than last year due to increased global demand for jets as well as increased U.S. defense spending. Over the past twelve months, Lockheed Martin stock has lost 12.1% while the S&P 500 has added 8.9%.

LMT Earnings & Outlook

Net income in the quarter ended March 31 rose to $1.71 billion or $5.99 a share, from $1.31 billion or $4.02 a share, in the year-ago period. Revenue climbed to $14.34 billion from $11.64 billion a year earlier. Analysts surveyed by Refinitiv were expecting earnings of $4.34 per share on sales of $12.6 billion.

First quarter sales rose at all of the company’s segments. Aeronautics sales climbed 27% to $5.58 billion, missiles and fire control sales rose 40% to $2.35 billion, rotary and missions systems sales increased 17% to $3.76 billion and space sales rose 13% to $2.64 billion.

Lockheed Martin raised its full-year outlook and now expects earnings per share of $20.05 to $20.35, from the previous guidance of $19.15 to $19.45. It expects full-year sales in the range of $56.75 billion to $58.25 billion, up from a prior range of $55.75 billion to $57.25 billion. The Refinitiv consensus is earnings of $19.62 per share on revenue of $56.73 billion.

Lockheed Martin CEO Comments

Lockheed Martin Chairman and Chief Executive Marillyn Hewson commented, “The corporation had strong performance in the first quarter which has allowed us to increase our full year financial guidance for sales, profit, earnings per share and cash.”

“Our differentiated portfolio and record backlog position us well for continued growth, and we remain focused on delivering innovative technologies and solutions for our customers, and long-term value creation for stockholders,” concluded Hewson.

Lockheed Martin Corp Profile

Lockheed Martin is the largest defense contractor globally and is the undisputed leader in next-generation fighter aircraft, after being awarded the F-35 program in 2001. Total sales for Lockheed in 2017 stood at $50 billion.

Aeronautics is the largest business segment, accounting for about 40% sales. The remainder of the company’s sales are generated by rotary & mission systems (around 26%), space systems (16%), and missiles & fire control (17%).