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Why Is Lockheed (LMT) Down 0.4% Since Last Earnings Report?
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It has been about a month since the last earnings report for Lockheed Martin (LMT - Free Report) . Shares have lost about 0.4% in that time frame, outperforming 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 Q1 Earnings Beat Estimates, Sales Up Y/Y
Lockheed Martinreported first-quarter 2021 earnings of $6.56 per share, which surpassed the Zacks Consensus Estimate of $6.32 by 3.8%. The bottom line also improved 7.9% from the year-ago quarter’s $6.08. This year-over-year upside can be attributed to higher sales.
Operational Highlights
In the reported quarter, net sales amounted to $16,258 million, which missed the Zacks Consensus Estimate of $16,345 million by 0.5%. The reported figure, however, increased 3.9% from $15,651 million a year ago. Each of the company’s segments registered year-over-year growth in sales.
Backlog
Lockheed Martin ended the first quarter (on Mar 28, 2021) with $147.4 billion in backlog, up 0.2% from $147.1 billion at the end of 2020. Of this, the Aeronautics segment accounted for $53.3 billion, while Rotary and Mission Systems contributed $35.4 billion. Also, $28.8 billion came from Space Systems and $29.9 billion from the Missiles and Fire Control segment.
Segmental Performance
Aeronautics: Sales increased 0.3% year over year to $6,387 million, primarily driven by higher net sales from the F-16 program.
The segment’s operating profit improved 3% year over year to $693 million, whereas the operating margin expanded 30 basis points (bps) to 10.9%.
Missiles and Fire Control: Quarterly sales improved 11.4% year over year to $2,749 million owing to higher sales from tactical and strike missile programs as well as integrated air and missile defense programs.
The segment’s operating profit was $396 million, unchanged year over year, whereas the operating margin contracted 70 bps to 14.4%.
Rotary and Mission Systems: Quarterly sales of $4,107 million improved 10% from the prior-year quarter on account of higher sales for Sikorsky helicopter programs and training and logistics solutions programs.
The segment’s operating profit improved 15% year over year to $433 million, while the operating margin expanded 50 bps to 10.5%.
Space: Sales rose 3% year over year to about $3,105 million in the first quarter. The uptick was driven by higher net sales for the Atomic Weapons Establishment (AWE) program and Commercial Civil Space programs.
The segment’s operating profit declined 19% to $227 million, while its operating margin contracted 210 bps to 7.5% in the reported quarter.
Financial Condition
Lockheed Martin’s cash and cash equivalents totaled $2.93 billion as of Mar 28, 2021, compared with $3.16 billion at the end of 2020.
Long-term debt summed $11.66 billion, slightly lower than the long-term debt of $11.67 billion as of Dec 31, 2020.
Cash from operations at the end of first-quarter 2021 amounted to $1.75 billion compared with $2.3 billion a year ago.
During the reported quarter, the company repurchased 1.9 million shares for $1 billion compared with the buyback of 1.7 million shares for $756 million in the year-ago quarter.
Lockheed Martin paid out dividends worth $739 million to its shareholders in the first quarter compared with the year-ago quarter’s $693 million.
Guidance
For 2021, Lockheed Martin has updated its financial guidance. The company currently expects to generate revenues of $67.30-$68.70 billion compared with $67.10-$68.50 billion projected earlier. The Zacks Consensus Estimate for full-year revenues, pegged at $68.14 billion, lies above the midpoint of the company’s updated guidance range.
Earnings per share are anticipated to be in the $26.40-$26.70 range for 2021. The Zacks Consensus Estimate for the company’s full-year earnings, pegged at $26.33 per share, lies below the company’s guidance range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Lockheed has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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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Why Is Lockheed (LMT) Down 0.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Lockheed Martin (LMT - Free Report) . Shares have lost about 0.4% in that time frame, outperforming 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 Q1 Earnings Beat Estimates, Sales Up Y/Y
Lockheed Martinreported first-quarter 2021 earnings of $6.56 per share, which surpassed the Zacks Consensus Estimate of $6.32 by 3.8%. The bottom line also improved 7.9% from the year-ago quarter’s $6.08. This year-over-year upside can be attributed to higher sales.
Operational Highlights
In the reported quarter, net sales amounted to $16,258 million, which missed the Zacks Consensus Estimate of $16,345 million by 0.5%. The reported figure, however, increased 3.9% from $15,651 million a year ago. Each of the company’s segments registered year-over-year growth in sales.
Backlog
Lockheed Martin ended the first quarter (on Mar 28, 2021) with $147.4 billion in backlog, up 0.2% from $147.1 billion at the end of 2020. Of this, the Aeronautics segment accounted for $53.3 billion, while Rotary and Mission Systems contributed $35.4 billion. Also, $28.8 billion came from Space Systems and $29.9 billion from the Missiles and Fire Control segment.
Segmental Performance
Aeronautics: Sales increased 0.3% year over year to $6,387 million, primarily driven by higher net sales from the F-16 program.
The segment’s operating profit improved 3% year over year to $693 million, whereas the operating margin expanded 30 basis points (bps) to 10.9%.
Missiles and Fire Control: Quarterly sales improved 11.4% year over year to $2,749 million owing to higher sales from tactical and strike missile programs as well as integrated air and missile defense programs.
The segment’s operating profit was $396 million, unchanged year over year, whereas the operating margin contracted 70 bps to 14.4%.
Rotary and Mission Systems: Quarterly sales of $4,107 million improved 10% from the prior-year quarter on account of higher sales for Sikorsky helicopter programs and training and logistics solutions programs.
The segment’s operating profit improved 15% year over year to $433 million, while the operating margin expanded 50 bps to 10.5%.
Space: Sales rose 3% year over year to about $3,105 million in the first quarter. The uptick was driven by higher net sales for the Atomic Weapons Establishment (AWE) program and Commercial Civil Space programs.
The segment’s operating profit declined 19% to $227 million, while its operating margin contracted 210 bps to 7.5% in the reported quarter.
Financial Condition
Lockheed Martin’s cash and cash equivalents totaled $2.93 billion as of Mar 28, 2021, compared with $3.16 billion at the end of 2020.
Long-term debt summed $11.66 billion, slightly lower than the long-term debt of $11.67 billion as of Dec 31, 2020.
Cash from operations at the end of first-quarter 2021 amounted to $1.75 billion compared with $2.3 billion a year ago.
During the reported quarter, the company repurchased 1.9 million shares for $1 billion compared with the buyback of 1.7 million shares for $756 million in the year-ago quarter.
Lockheed Martin paid out dividends worth $739 million to its shareholders in the first quarter compared with the year-ago quarter’s $693 million.
Guidance
For 2021, Lockheed Martin has updated its financial guidance. The company currently expects to generate revenues of $67.30-$68.70 billion compared with $67.10-$68.50 billion projected earlier. The Zacks Consensus Estimate for full-year revenues, pegged at $68.14 billion, lies above the midpoint of the company’s updated guidance range.
Earnings per share are anticipated to be in the $26.40-$26.70 range for 2021. The Zacks Consensus Estimate for the company’s full-year earnings, pegged at $26.33 per share, lies below the company’s guidance range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Lockheed has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. 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.