Lockheed Martin (NYSE: LMT) It beat earnings but missed revenue due to delays in F-35 deliveries, and trimmed its full-year guidance. Investors were stunned by the news, sending Lockheed shares down 5% as of 10:30 a.m. ET.
Solid quarter under the surface
Lockheed Martin is the largest company in the world Defense contractorand earned $6.80 per share on sales of $17.1 billion in the third quarter. That’s a mixed result compared to Wall Street’s $6.50 per share on sales of $17.4 billion.
Delays in F-35 deliveries resulted in a $400 million loss in sales in the quarter, but the company expects to make up at least some of that loss in the coming quarters. The company raised its full-year 2024 earnings forecast to $26.65 per share, from $26.10 to $26.60 per share. It now expects annual revenue of $71.25 billion, reducing its previous forecast of $70.5 billion to $71.5 billion.
“As a result of our strong year-to-date results and confidence in our near-term performance, we are raising our forecasts for full-year 2024 sales, segment operating profit (earnings per share) and free cash flow.” CEO Jim Taiclet said in a statement.
Is Lockheed Martin a buy?
Wall Street seemed to be focusing on the weak 1% year-over-year sales growth in the quarter, but for longer-term focused investors, there were no danger signs in the quarter.
Lockheed Martin’s operating margin of 12.5% came in about 60 basis points ahead of expectations, and free cash flow of $2.1 billion was well above Wall Street expectations of $1.3 billion. Strong space and missile bookings also helped Lockheed Martin produce a book-to-bill ratio of 1.43 in the quarter, positioning it well for future periods.
The company also raised its dividend by 5% and authorized an additional $3 billion in stock buybacks.
Lockheed Martin plays a leading role in some of the nation’s most important defense priorities, and a $165 billion backlog of future work provides some degree of predictability. For investors looking for a solid income investment with some upside growth, Lockheed remains a solid defensive option.
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Lou Whitman He has positions at Lockheed Martin. The Motley Fool recommends Lockheed Martin. The Motley Fool has Disclosure policy.
Why is Lockheed Martin stock losing ground today? Originally published by The Motley Fool