LMT stock: Lockheed slashes forecast after shortfall as defense giants wipe out Ukraine invasion gains

Lockheed Martin (LMT) reported on Tuesday that second-quarter earnings and revenue were below analysts’ expectations, and the defense giant also cut its forecast. LMT stock closed flat on Tuesday after falling below a key level on Monday.


Lockheed Martin is kicking off defense gains, and not in a good way. Defense stocks had rallied behind Russia’s invasion of Ukraine earlier this year on hopes of increased military spending in the long run. But stocks have deviated or retreated. Northrop Grumman (NOC), General dynamics (GD) and Raytheon Technologies (RTX), which all report next week, fell slightly on Tuesday.

Lockheed Earnings

The defense contractor reported earnings of $1.16 per share, including charges of $5.16 per share. It’s against views for $1.88. Revenue fell 9% to $15.4 billion. Analysts had expected $15.98 billion.

Lockheed Martin is best known for manufacturing the F-22 and F-35 fighter jets. And it produces an arsenal of helicopters, aircraft carriers, ships, drones, missiles, surveillance and defense systems, as well as armored and commercial vehicles. Revenue from Lockheed’s Aerospace segment, which manufactures the F-35 fighters, fell to $5.8 billion, down 12% from the same quarter of the year. The LMT report cites $790 million in costs and lost sales related to F-35 production contract issues with the US government. The company could also owe $1 billion to third parties if the contract is terminated.

“Until a final agreement is reached or the U.S. government provides additional contractual authorization and funding, the Company’s results of operations, cash flow and financial condition will continue to be adversely affected. and the impacts could be significant,” Lockheed wrote in the results. Release.

“While revenue in the period was impacted by supply chain impacts and the timing of customer contract negotiations, our cost management initiatives resulted in increased margins,” said CEO James Taiclet in the ad. “In addition, our strong cash generation also continues to provide the resources needed to invest in building the foundations for future revenue and margin growth opportunities.

However, Lockheed Martin also lowered its forecast. It now expects annual EPS of around $21.55 per share on revenue of $65.25 billion, versus its previous guidance of $26.70 EPS on revenue of 66. billions of dollars.

Lockheed stock

LMT stock ended the trading day up 0.68% at $389.93 after slipping almost 4% before the opening bell. On Monday, Lockheed stock fell 2.8%, closing below its 200-day line and completely wiping out all of its gains since its peak in late February at the start of the Russian-Ukrainian war.

General Dynamics stock ended Tuesday up 2.25%. Raytheon stock, which is heavily exposed to civil aerospace, climbed 4.18%. Both also wiped out their invasion gains from Russia. Northrop stock held up better than its peers and ended the day up 1.67%. On Monday, NOC stock fell 2.6% and is trading just below its 50-day line.

You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison


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