Lockheed Earnings Are Coming. What to Expect.

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Defense spending is on the rise around the globe. That’s good for Lockheed Martin’s business, but investors should still brace for a sales “miss” when the company reports first-quarter earnings on Tuesday morning.

Wall Street is looking for per-share earnings of $6.05 from $15 billion in sales. A year ago,

Lockheed

(ticker: LMT) reported per-share earnings of $6.44 from sales of just under $15 billion.

The 2023 sales estimate looks like a stretch. Lockheed CFO Jesus Malave told investors on March 16 at an investment conference that sales would likely be a little below that due to supply chain constraints.

One of the supply-chain issues is related to the F-35 jet fighter. Lockheed delivered fewer F-35s in 2022 than it expected because of engine delays. That engine is supplied by

Raytheon Technologies

‘ (RTX) Pratt & Whitney division.

Lockheed delivered 141 F-35s in 2022. It wants to be delivering 156 a year by 2025.

Along with a supply chain update, investors will want to hear about the outlook for the rest of 2023. In January when reporting fourth-quarter numbers, Lockheed management said it expected to earn between $26.60 and $26.90 a share from between $65 billion and $66 billion in sales. Free cash flow is expected to be greater than $6.2 billion.

Options markets imply Lockheed stock will move roughly 3% or 4%, up or down, following earnings. Shares rose 1.8% after the company reported better-than-expected fourth-quarter results.

Shares are flat year to date and up about 4% over the past 12 months. The

S&P 500
and

Dow Jones Industrial Average
are down about 6% and 2%, respectively, over the past 12 months.

Management will host a conference call at 11 a.m. Eastern time to discuss results on Tuesday morning.

Write to Al Root at [email protected]