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Lockheed (LMT) Down 2.8% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Lockheed Martin (LMT - Free Report) . Shares have lost about 2.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Lockheed due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Lockheed Martin reported fourth-quarter 2024 adjusted earnings of $7.67 per share, which beat the Zacks Consensus Estimate of $6.60 by 16.2%. The bottom line slipped 0.4% from the year-ago quarter's adjusted figure of $7.70 per share.
The company reported GAAP earnings of $2.22 per share compared with $7.58 a year ago.
LMT reported 2024 adjusted earnings of $28.47 per share, which came in higher than the year-ago figure of $27.69. The year-over-year bottom-line figure also surpassed the Zacks Consensus Estimate of $26.70.
Operational Highlights of Lockheed
Net sales were $18.62 billion, which missed the Zacks Consensus Estimate of $18.85 billion by 1.2%. The top line also dropped 1.3% from $18.87 billion reported in the year-ago quarter.
The company reported sales of $71.04 billion in 2024, which were higher than $67.57 billion in 2023. The full-year top-line figure, however, missed the Zacks Consensus Estimate of $71.27 billion.
LMT’s Backlog
LMT’s backlog as of Dec. 31, 2024, was $176.04 billion compared with $160.57 billion as of Dec. 31, 2023.
Our model projected a backlog worth $171.32 billion for 2024.
The Aeronautics segment accounted for $62.76 billion of the total backlog amount while the Missiles and Fire Control segment contributed $38.78 billion. The Rotary and Mission Systems segment contributed $38.12 billion while the Space unit accounted for $36.38 billion.
Lockheed’s Segmental Performance
Aeronautics: Sales increased 5.2% year over year to $8.01 billion. This rise was due to higher sales volume from the F-35 program and increased volume on sustainment contracts.
The segment’s operating profit dropped 43% year over year to $434 million. The operating margin also contracted 460 basis points (bps) to 5.4%.
Missiles and Fire Control: Quarterly sales improved a solid 7.6% year over year to $3.41 billion. This was on account of higher sales from tactical and strike missile programs as well as integrated air and missile defense programs.
The segment incurred an operating loss of $804 million against the operating profit of $395 million in the prior-year quarter. The operating loss margin deteriorated to 23.6% from the year-ago operating profit margin level of 12.5%.
Space: The top line decreased 13% year over year to $2.94 billion due to lower sales from national security space programs owing to lower volume from the Next Generation Overhead Persistent Infrared. Lower commercial civil space due to decreased volume on the Orion program also contributed to this unit’s dismal sales performance.
The segment’s operating profit decreased 7.8% to $283 million. The operating margin, however, expanded 50 bps to 9.6%.
Rotary and Mission Systems: Quarterly revenues decreased 9.6% to $4.26 billion on a year-over-year basis. This decrease was primarily due to lower sales from Sikorsky helicopter programs, integrated warfare systems and sensors (IWSS) programs and various C6ISR programs.
The segment’s operating profit decreased 11.4% to $513 million. The operating margin deteriorated 30 bps to 12% in the said time frame.
Financial Condition of LMT
Lockheed’s cash and cash equivalents totaled $2.48 billion at the end of 2024 compared with $1.44 billion at the end of 2023.
Cash from operating activities amounted to $6.97 billion as of Dec. 31, 2024, compared with $7.92 billion a year ago.
Long-term debt as of Dec. 31, 2024, totaled $19.63 billion, down from $17.29 billion as of Dec. 31, 2023.
Lockheed’s 2025 Guidance
Lockheed expects to generate sales in the range of $73.75-$74.75 billion in 2025. The Zacks Consensus Estimate is pegged at $73.99 billion, which lies below the midpoint of the company’s sales guidance.
LMT projects its adjusted earnings per share to be in the range of $27.00-$27.30. The consensus estimate is currently pegged at $27.78 per share, which is above the company’s guided range.
Lockheed expects to generate cash from operations in the range of $8.50-$8.70 billion. It also expects capital expenditure to be approximately $1.90 billion.
Lockheed expects to generate a free cash flow in the range of $6.60-$6.80 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Lockheed has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Lockheed has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Lockheed (LMT) Down 2.8% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Lockheed Martin (LMT - Free Report) . Shares have lost about 2.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Lockheed due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Lockheed's Q4 Earnings Beat Estimates, Revenues Decline Y/Y
Lockheed Martin reported fourth-quarter 2024 adjusted earnings of $7.67 per share, which beat the Zacks Consensus Estimate of $6.60 by 16.2%. The bottom line slipped 0.4% from the year-ago quarter's adjusted figure of $7.70 per share.
The company reported GAAP earnings of $2.22 per share compared with $7.58 a year ago.
LMT reported 2024 adjusted earnings of $28.47 per share, which came in higher than the year-ago figure of $27.69. The year-over-year bottom-line figure also surpassed the Zacks Consensus Estimate of $26.70.
Operational Highlights of Lockheed
Net sales were $18.62 billion, which missed the Zacks Consensus Estimate of $18.85 billion by 1.2%. The top line also dropped 1.3% from $18.87 billion reported in the year-ago quarter.
The company reported sales of $71.04 billion in 2024, which were higher than $67.57 billion in 2023. The full-year top-line figure, however, missed the Zacks Consensus Estimate of $71.27 billion.
LMT’s Backlog
LMT’s backlog as of Dec. 31, 2024, was $176.04 billion compared with $160.57 billion as of Dec. 31, 2023.
Our model projected a backlog worth $171.32 billion for 2024.
The Aeronautics segment accounted for $62.76 billion of the total backlog amount while the Missiles and Fire Control segment contributed $38.78 billion. The Rotary and Mission Systems segment contributed $38.12 billion while the Space unit accounted for $36.38 billion.
Lockheed’s Segmental Performance
Aeronautics: Sales increased 5.2% year over year to $8.01 billion. This rise was due to higher sales volume from the F-35 program and increased volume on sustainment contracts.
The segment’s operating profit dropped 43% year over year to $434 million. The operating margin also contracted 460 basis points (bps) to 5.4%.
Missiles and Fire Control: Quarterly sales improved a solid 7.6% year over year to $3.41 billion. This was on account of higher sales from tactical and strike missile programs as well as integrated air and missile defense programs.
The segment incurred an operating loss of $804 million against the operating profit of $395 million in the prior-year quarter. The operating loss margin deteriorated to 23.6% from the year-ago operating profit margin level of 12.5%.
Space: The top line decreased 13% year over year to $2.94 billion due to lower sales from national security space programs owing to lower volume from the Next Generation Overhead Persistent Infrared. Lower commercial civil space due to decreased volume on the Orion program also contributed to this unit’s dismal sales performance.
The segment’s operating profit decreased 7.8% to $283 million. The operating margin, however, expanded 50 bps to 9.6%.
Rotary and Mission Systems: Quarterly revenues decreased 9.6% to $4.26 billion on a year-over-year basis. This decrease was primarily due to lower sales from Sikorsky helicopter programs, integrated warfare systems and sensors (IWSS) programs and various C6ISR programs.
The segment’s operating profit decreased 11.4% to $513 million. The operating margin deteriorated 30 bps to 12% in the said time frame.
Financial Condition of LMT
Lockheed’s cash and cash equivalents totaled $2.48 billion at the end of 2024 compared with $1.44 billion at the end of 2023.
Cash from operating activities amounted to $6.97 billion as of Dec. 31, 2024, compared with $7.92 billion a year ago.
Long-term debt as of Dec. 31, 2024, totaled $19.63 billion, down from $17.29 billion as of Dec. 31, 2023.
Lockheed’s 2025 Guidance
Lockheed expects to generate sales in the range of $73.75-$74.75 billion in 2025. The Zacks Consensus Estimate is pegged at $73.99 billion, which lies below the midpoint of the company’s sales guidance.
LMT projects its adjusted earnings per share to be in the range of $27.00-$27.30. The consensus estimate is currently pegged at $27.78 per share, which is above the company’s guided range.
Lockheed expects to generate cash from operations in the range of $8.50-$8.70 billion. It also expects capital expenditure to be approximately $1.90 billion.
Lockheed expects to generate a free cash flow in the range of $6.60-$6.80 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Lockheed has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Lockheed has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.