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Why Is Lockheed (LMT) Down 0.6% Since Last Earnings Report?
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A month has gone by since the last earnings report for Lockheed Martin (LMT - Free Report) . Shares have lost about 0.6% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Lockheed Martin Q4 Earnings Top Estimates, Sales Rise Y/Y
Lockheed Martin reported fourth-quarter 2021 adjusted earnings of $7.24 per share, which surpassed the Zacks Consensus Estimate of $7.23 by 0.1%.
The company reported GAAP earnings of $7.47, which increased 17.1% year over year.
For 2021, adjusted earnings were $22.04 per share, which missed the Zacks Consensus Estimate of $22.56 by 2.3%.
Operational Highlights
In the reported quarter, net sales amounted to $17.73 billion, which surpassed the Zacks Consensus Estimate by 0.4%. The top line increased 4.1% from $17 billion reported in the year-ago quarter.
In 2021, Lockheed Martin’s total revenues grew 2.5% year over year to $67.04 billion. Full-year revenues came almost at par with the Zacks Consensus Estimate.
Backlog
Lockheed Martin ended 2021 (on Dec 31, 2021,) with $135.36 billion in backlog compared with $147.13 billion at the end of 2020. Of this, the Aeronautics segment accounted for $49.12 billion, while Rotary and Mission Systems contributed $33.70 billion. Meanwhile, Space Systems and the Missiles and Fire Control segments contributed $25.52 billion and $27.02 billion, respectively.
Segmental Performance
Aeronautics: Sales increased 6% year over year to $7.13 billion, primarily due to higher net sales from the F-35 program and classified contracts.
The segment’s operating profit improved 13% year over year to $820 million. Operating margin expanded 70 basis points (bps) to 11.5%.
Missiles and Fire Control:Quarterly sales increased 12% year over year to $3.22 billion due to higher net sales for integrated air and missile defense programs, and tactical and strike missile programs.
The segment’s operating profit improved 17% year over year to $438 million, while operating margin expanded 60 bps to 13.6%.
Space Systems:Sales decreased 10% year over year to $2.92 billion in the fourth quarter. The decrease was primarily due to lower net sales for the Atomic Weapons Establishment program as it was no longer included in the company's financial results beginning in the fourth quarter of 2021. Also, lower net sales from commercial civil space programs contributed to lower sales of the segment.
The segment’s operating profit decreased 16% to $308 million. Operating margin contracted 90 bps to 10.5% in the quarter under review.
Rotary and Mission Systems:Quarterly revenue increased 6% to $4.46 billion on a year-over-year basis. The increase was primarily due to higher net sales for various C6ISR programs, integrated warfare systems and sensors (IWSS) programs, and training and logistics solutions programs.
The segment’s operating profit rose 10% to $448 million in the fourth quarter. Operating margin expanded 40 bps to 10% in the reported quarter.
Financial Condition
Lockheed Martin’s cash and cash equivalents totaled $3.60 billion at the end of 2021 compared with $3.16 billion at the end of 2020.
Cash from operations at the end of 2021 amounted to $9.22 billion compared with $8.18 billion a year ago.
Guidance
Lockheed Martin issued its financial guidance for 2022.
The company currently expects to generate revenues worth approximately $66 billion for 2022. The Zacks Consensus Estimate for full-year revenues, which is pegged at $66.29 billion, is slightly more than the company’s guidance.
Earnings per share are anticipated at $26.70 for 2022. The Zacks Consensus Estimate for the company’s full-year earnings, which stands at $26.32 per share, lies below LMT’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
At this time, Lockheed has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. 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 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 this revision 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 0.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Lockheed Martin (LMT - Free Report) . Shares have lost about 0.6% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Lockheed Martin Q4 Earnings Top Estimates, Sales Rise Y/Y
Lockheed Martin reported fourth-quarter 2021 adjusted earnings of $7.24 per share, which surpassed the Zacks Consensus Estimate of $7.23 by 0.1%.
The company reported GAAP earnings of $7.47, which increased 17.1% year over year.
For 2021, adjusted earnings were $22.04 per share, which missed the Zacks Consensus Estimate of $22.56 by 2.3%.
Operational Highlights
In the reported quarter, net sales amounted to $17.73 billion, which surpassed the Zacks Consensus Estimate by 0.4%. The top line increased 4.1% from $17 billion reported in the year-ago quarter.
In 2021, Lockheed Martin’s total revenues grew 2.5% year over year to $67.04 billion. Full-year revenues came almost at par with the Zacks Consensus Estimate.
Backlog
Lockheed Martin ended 2021 (on Dec 31, 2021,) with $135.36 billion in backlog compared with $147.13 billion at the end of 2020. Of this, the Aeronautics segment accounted for $49.12 billion, while Rotary and Mission Systems contributed $33.70 billion. Meanwhile, Space Systems and the Missiles and Fire Control segments contributed $25.52 billion and $27.02 billion, respectively.
Segmental Performance
Aeronautics: Sales increased 6% year over year to $7.13 billion, primarily due to higher net sales from the F-35 program and classified contracts.
The segment’s operating profit improved 13% year over year to $820 million. Operating margin expanded 70 basis points (bps) to 11.5%.
Missiles and Fire Control:Quarterly sales increased 12% year over year to $3.22 billion due to higher net sales for integrated air and missile defense programs, and tactical and strike missile programs.
The segment’s operating profit improved 17% year over year to $438 million, while operating margin expanded 60 bps to 13.6%.
Space Systems:Sales decreased 10% year over year to $2.92 billion in the fourth quarter. The decrease was primarily due to lower net sales for the Atomic Weapons Establishment program as it was no longer included in the company's financial results beginning in the fourth quarter of 2021. Also, lower net sales from commercial civil space programs contributed to lower sales of the segment.
The segment’s operating profit decreased 16% to $308 million. Operating margin contracted 90 bps to 10.5% in the quarter under review.
Rotary and Mission Systems:Quarterly revenue increased 6% to $4.46 billion on a year-over-year basis. The increase was primarily due to higher net sales for various C6ISR programs, integrated warfare systems and sensors (IWSS) programs, and training and logistics solutions programs.
The segment’s operating profit rose 10% to $448 million in the fourth quarter. Operating margin expanded 40 bps to 10% in the reported quarter.
Financial Condition
Lockheed Martin’s cash and cash equivalents totaled $3.60 billion at the end of 2021 compared with $3.16 billion at the end of 2020.
Cash from operations at the end of 2021 amounted to $9.22 billion compared with $8.18 billion a year ago.
Guidance
Lockheed Martin issued its financial guidance for 2022.
The company currently expects to generate revenues worth approximately $66 billion for 2022. The Zacks Consensus Estimate for full-year revenues, which is pegged at $66.29 billion, is slightly more than the company’s guidance.
Earnings per share are anticipated at $26.70 for 2022. The Zacks Consensus Estimate for the company’s full-year earnings, which stands at $26.32 per share, lies below LMT’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
At this time, Lockheed has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. 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 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 this revision 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.