Lockheed Martin (LMT) on Tuesday reported second-quarter earnings and revenue came in below analyst expectations, and the defense giant also slashed guidance. LMT stock closed flat on Tuesday after breaking below a key level Monday.
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Lockheed Martin kicks off defense earnings, and not in a good way. Defense stocks had rallied on Russia’s Ukraine invasion earlier this year, amid hopes for increased military spending long term. But shares have moved sideways or pulled back. Northrop Grumman (NOC), General Dynamics (GD) and Raytheon Technologies (RTX), all of which report next week, fell modestly Tuesday.
Lockheed Earnings
The defense contractor reported earnings of $1.16 per share, including charges of $5.16 per share. That’s vs. views for $1.88. Revenue fell 9% to $15.4 billion. Analysts expected $15.98 billion.
Lockheed Martin is best known for making the F-22 and F-35 fighter jets. And it produces an arsenal of helicopters, carriers, ships, drones, missiles, surveillance and defense systems, as well as armored and commercial vehicles. Revenue for Lockheed’s Aeronautics segment, which makes the F-35 fighters, fell to $5.8 billion, down 12% vs. the same quarter the year. LMT’s report noted $790 million in costs and lost sales related to F-35 production contract issues with the U.S. government. The company could also owe $1 billion to third parties if the contract is terminated.
“Until a final agreement is reached or the U.S. Government otherwise provides additional contractual authorization and funding, the company’s results of operations, cash flows, and financial condition will continue to be negatively impacted and the impacts could be material,” Lockheed wrote in the earnings release.
“Although revenue in the period was affected by supply chain impacts and the timing of customer contract negotiations, our cost management initiatives resulted in margin expansion,” CEO James Taiclet said in the announcement. “Moreover, our robust cash generation also continues to provide the resources to invest in building the foundation for future revenue and margin growth opportunities.
However, Lockheed Martin also lowered its guidance. It now expects full-year EPS of about $21.55 per share on $65.25 billion revenue vs. its prior target of $26.70 EPS on $66 billion of revenue.
Lockheed Stock
LMT stock ended the trading day up 0.68% to $389.93 after it slipped nearly 4% before the opening bell. On Monday, Lockheed stock sank 2.8%, closing below its 200-day line and fully erasing all of its gains from its late February spike at the start of the Russia-Ukraine war.
General Dynamics stock ended Tuesday up 2.25%. Raytheon stock, which has a lot of civilian aerospace exposure, climbed 4.18%. Both have wiped out their Russia invasion gains as well. Northrop stock has held up better than its peers and finished the day up 1.67%. On Monday, NOC stock retreated 2.6%, and is trading just below its 50-day line.
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Source: https://www.investors.com/news/lmt-stock-lockheed-martin-slashes-guidance-earnings-miss-defense-giants-lose-ukraine-invasion-gains/?src=A00220&yptr=yahoo