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Will Segmental Performance Aid Lockheed's (LMT) Q1 Earnings?
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Lockheed Martin Corporation (LMT - Free Report) is slated to release first-quarter 2020 results on Apr 21, before the opening bell.
Consistent revenue growth across its major segments is expected to get reflected in the company’s upcoming results. However, escalated costs may have affected quarterly earnings.
Let's see how things are shaping up prior to this announcement.
Aeronautics Unit: A Key Catalyst
Lockheed Martin’s Aeronautics segment has been a major growth catalyst for this defense contractor for decades. It primarily manufactures advanced, combat-proven jets and comprises almost 40% of the company’s top line. The strength in the Aeronautics business division is expected to get reflected in the soon-to-be-reported quarter’s results as Lockheed Martin has delivered a notable number of military aircraft during the first quarter.
During the quarter, the company delivered its first block 8.1 upgrade HC-130J to the U.S. Coast Guard. Also, its Aerospace unit delivered the second of the two KC-130J Super Hercules aerial refuelers to France. It has also delivered its 500th F-35 aircraft to the U.S. Air Force, a program that has been the primary contributor to the segment’s top line.
Such deliveries are expected to have boosted this unit’s top line. Notably, the Zacks Consensus Estimate for this unit’s revenues stands at $5,937 million, indicating a 6.3% improvement from the prior-year quarter’s reported figure.
The MFC Unit: Another Growth Driver
We expect Lockheed Martin’s Missiles and Fire Control (MFC) segment, which provides critical missile defense support to the United States and its foreign allies, to have delivered a strong operational performance in the soon-to-be-reported quarter. Notably, factors like consistent deliveries of critical and tactical strike weapons, developments in new hypersonic and classified programs and production of PAC-3 missiles are expected to have contributed to this unit’s growth in the first quarter of 2020.
The Zacks Consensus Estimate for MFC segment revenues is currently pegged at $2,533 million, implying a 7.8% increase from the year-ago quarter’s reported figure.
Lockheed Martin Corporation Price and EPS Surprise
Solid revenue growth in each of the company’s business segments is likely to have boosted Lockheed Martin’s overall top line in the to-be-reported quarter. The Zacks Consensus Estimate for the company’s first-quarter revenues stands at $15.23 billion, indicating a solid 6.2% increase from the year-earlier quarter’s reported figure.
However, due to the ongoing crisis caused by the coronavirus pandemic, the company might have been unable to make significant deliveries during the latter part of the quarter. Also, in mid-March, the company hired about 1,000 employees within two weeks and increased payments to suppliers, per a Reuters report, to counter the impact of the virus outbreak. This may have escalated the company’s quarterly expenses, which along with lack of deliveries might have impacted its quarterly bottom line.
In line with this, the Zacks Consensus Estimate for the defense giant’s first-quarter earnings is pegged at $5.75 per share, indicating a decline of 4% from the prior-year quarter's reported number.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Lockheed Martin this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some defense companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Northrop Grumman Corp. (NOC - Free Report) is scheduled to report first-quarter 2020 results on Apr 29. The company has an Earnings ESP of +1.66% and a Zacks Rank #3.
Huntington Ingalls Industries (HII - Free Report) is scheduled to report first-quarter 2020 results on May 7. The company has an Earnings ESP of +1.79% and a Zacks Rank #2.
Curtiss-Wright Corporation (CW - Free Report) is scheduled to report first-quarter 2020 results on May 7. The company has an Earnings ESP of +1.75% and a Zacks Rank #3.
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Will Segmental Performance Aid Lockheed's (LMT) Q1 Earnings?
Lockheed Martin Corporation (LMT - Free Report) is slated to release first-quarter 2020 results on Apr 21, before the opening bell.
Consistent revenue growth across its major segments is expected to get reflected in the company’s upcoming results. However, escalated costs may have affected quarterly earnings.
Let's see how things are shaping up prior to this announcement.
Aeronautics Unit: A Key Catalyst
Lockheed Martin’s Aeronautics segment has been a major growth catalyst for this defense contractor for decades. It primarily manufactures advanced, combat-proven jets and comprises almost 40% of the company’s top line. The strength in the Aeronautics business division is expected to get reflected in the soon-to-be-reported quarter’s results as Lockheed Martin has delivered a notable number of military aircraft during the first quarter.
During the quarter, the company delivered its first block 8.1 upgrade HC-130J to the U.S. Coast Guard. Also, its Aerospace unit delivered the second of the two KC-130J Super Hercules aerial refuelers to France. It has also delivered its 500th F-35 aircraft to the U.S. Air Force, a program that has been the primary contributor to the segment’s top line.
Such deliveries are expected to have boosted this unit’s top line. Notably, the Zacks Consensus Estimate for this unit’s revenues stands at $5,937 million, indicating a 6.3% improvement from the prior-year quarter’s reported figure.
The MFC Unit: Another Growth Driver
We expect Lockheed Martin’s Missiles and Fire Control (MFC) segment, which provides critical missile defense support to the United States and its foreign allies, to have delivered a strong operational performance in the soon-to-be-reported quarter. Notably, factors like consistent deliveries of critical and tactical strike weapons, developments in new hypersonic and classified programs and production of PAC-3 missiles are expected to have contributed to this unit’s growth in the first quarter of 2020.
The Zacks Consensus Estimate for MFC segment revenues is currently pegged at $2,533 million, implying a 7.8% increase from the year-ago quarter’s reported figure.
Lockheed Martin Corporation Price and EPS Surprise
Lockheed Martin Corporation price-eps-surprise | Lockheed Martin Corporation Quote
Earnings and Revenue Estimates
Solid revenue growth in each of the company’s business segments is likely to have boosted Lockheed Martin’s overall top line in the to-be-reported quarter. The Zacks Consensus Estimate for the company’s first-quarter revenues stands at $15.23 billion, indicating a solid 6.2% increase from the year-earlier quarter’s reported figure.
However, due to the ongoing crisis caused by the coronavirus pandemic, the company might have been unable to make significant deliveries during the latter part of the quarter. Also, in mid-March, the company hired about 1,000 employees within two weeks and increased payments to suppliers, per a Reuters report, to counter the impact of the virus outbreak. This may have escalated the company’s quarterly expenses, which along with lack of deliveries might have impacted its quarterly bottom line.
In line with this, the Zacks Consensus Estimate for the defense giant’s first-quarter earnings is pegged at $5.75 per share, indicating a decline of 4% from the prior-year quarter's reported number.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Lockheed Martin this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Lockheed Martin has an Earnings ESP of +1.30% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Here are some defense companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Northrop Grumman Corp. (NOC - Free Report) is scheduled to report first-quarter 2020 results on Apr 29. The company has an Earnings ESP of +1.66% and a Zacks Rank #3.
Huntington Ingalls Industries (HII - Free Report) is scheduled to report first-quarter 2020 results on May 7. The company has an Earnings ESP of +1.79% and a Zacks Rank #2.
Curtiss-Wright Corporation (CW - Free Report) is scheduled to report first-quarter 2020 results on May 7. The company has an Earnings ESP of +1.75% and a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>