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Lockheed Beats on Q3 Earnings but Misses Sales, Ups '24 EPS View
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Lockheed Martin Corporation (LMT - Free Report) 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.
Lockheed Martin Corporation Price, Consensus and EPS Surprise
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.
Hexcel Corporation (HXL - Free Report) reported third-quarter 2024 adjusted earnings of 47 cents per share, which improved 23.7% from the year-ago figure of 38 cents. The bottom line also surpassed the Zacks Consensus Estimate by 2.2%.
In the third quarter, the company’s net sales totaled $456.5 million, which beat the Zacks Consensus Estimate of $456.2 million by 0.1%. The top line also witnessed an improvement of 8.8% from the year-ago quarter’s reported sales of $419.5 million.
A Couple of Upcoming Defense Releases
Textron Inc. (TXT - Free Report) is scheduled to report third-quarter 2024 results on Oct. 24, before the opening bell. The stock boasts a four-quarter average earnings surprise of 4.75%.
The consensus estimate for sales is pegged at $3.51 billion, which reflects an improvement of 4.9% from the year-ago reported actuals. The consensus mark for earnings is pegged at $1.46 per share.
Northrop Grumman (NOC - Free Report) is scheduled to report third-quarter 2024 results on Oct. 24, before the opening bell. The stock boasts a four-quarter average earnings surprise of 7.68%.
The consensus estimate for sales is pegged at $10.23 billion, which reflects an improvement of 4.6% from the year-ago reported actuals. The consensus mark for earnings is pegged at $6.07 per share.
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Lockheed Beats on Q3 Earnings but Misses Sales, Ups '24 EPS View
Lockheed Martin Corporation (LMT - Free Report) 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.
Lockheed Martin Corporation Price, Consensus and EPS Surprise
Lockheed Martin Corporation price-consensus-eps-surprise-chart | Lockheed Martin Corporation Quote
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.
Zacks Rank
LMT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A Recent Defense Release
Hexcel Corporation (HXL - Free Report) reported third-quarter 2024 adjusted earnings of 47 cents per share, which improved 23.7% from the year-ago figure of 38 cents. The bottom line also surpassed the Zacks Consensus Estimate by 2.2%.
In the third quarter, the company’s net sales totaled $456.5 million, which beat the Zacks Consensus Estimate of $456.2 million by 0.1%. The top line also witnessed an improvement of 8.8% from the year-ago quarter’s reported sales of $419.5 million.
A Couple of Upcoming Defense Releases
Textron Inc. (TXT - Free Report) is scheduled to report third-quarter 2024 results on Oct. 24, before the opening bell. The stock boasts a four-quarter average earnings surprise of 4.75%.
The consensus estimate for sales is pegged at $3.51 billion, which reflects an improvement of 4.9% from the year-ago reported actuals. The consensus mark for earnings is pegged at $1.46 per share.
Northrop Grumman (NOC - Free Report) is scheduled to report third-quarter 2024 results on Oct. 24, before the opening bell. The stock boasts a four-quarter average earnings surprise of 7.68%.
The consensus estimate for sales is pegged at $10.23 billion, which reflects an improvement of 4.6% from the year-ago reported actuals. The consensus mark for earnings is pegged at $6.07 per share.