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Lockheed Martin (LMT) Q3 Earnings Top Estimates, Sales Down Y/Y

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Lockheed Martin Corporation LMT reported third-quarter 2021 adjusted earnings of $6.66 per share, which surpassed the Zacks Consensus Estimate of $1.96 by a whopping 239.8%.

The company reported GAAP earnings of $2.21, which declined 64.6 % year over year.

Operational Highlights

In the reported quarter, net sales amounted to $16,028 million, which laggedthe Zacks Consensus Estimate of $17,152 million by 6.6%. The top line decreased 2.8% from $16,495 million reported in the year-ago quarter.

Backlog

Lockheed Martin ended the third quarter (on Sep 26, 2021) with $134.8 billion in backlog compared with $147.1 billion at the end of 2020. Of this, the Aeronautics segment accounted for $47.9 billion, while Rotary and Mission Systems contributed $34.1 billion.Meanwhile, Space Systems, and Missiles and Fire Control segments contributed $25.3 billion and $27.6 billion, respectively.

Segmental Performance

Aeronautics: Sales decreased 1.7% year over year to $6.57 billion, primarily due to lower net sales from the F-35 program.

The segment’s operating profit improved 1.3% year over year to $714 million. Operating margin expanded 30 basis points (bps) to 10.9%.

Missiles and Fire Control: Quarterly sales declined 6.4% year over year to $2.78 billion, owing to lower net sales from tactical and strike missile programs, and sensors and global sustainment programs.

The segment’s operating profit improved 2% year over year to $413 million, while operating margin expanded 130 bps to 14.9%.

Space Systems: Sales decreased 5.2% year over year to $2.70 billion in the third quarter. The decrease was primarily due tolower net sales for Atomic Weapons Establishment (“AWE”) program, as it is no longer included in the company's financial results beginning in the third quarter of 2021.

The segment’s operating profit increased 6.5% to $264 million. Operating margin expanded 110 bps to 9.8% in the quarter under review.

Rotary and Mission Systems: Quarterly sales remained almost flat at $3.98 billion on a year-over-year basis.The lower net sales from integrated warfare systems and sensors (IWSS) programs wereoffset by higher net sales for Sikorsky helicopter programs.

The segment’s operating profit rose 13.6% to $459 million in the third quarter. Operating margin expanded 140 bps to 11.5% in the reported quarter.

Lockheed Martin Corporation Price, Consensus and EPS Surprise

Lockheed Martin Corporation Price, Consensus and EPS Surprise
Lockheed Martin Corporation Price, Consensus and EPS Surprise

Lockheed Martin Corporation price-consensus-eps-surprise-chart | Lockheed Martin Corporation Quote

Financial Condition

Lockheed Martin’s cash and cash equivalents totaled $2.73 billion as of Sep 26, 2021, compared with $3.16 billion at the end of 2020.

Long-term debt was $11.67 billion, remaining flat with prior-year-end level.

Cash from operations at the end of third-quarter 2021 amounted to $4.95 billion compared with $6.38 billion a year ago.

Guidance

Lockheed Martin has updated its 2021 guidance.

The company currently expects to generate revenues worth approximately$67 billion for 2021, lower than its previously guided revenue range of $67.30 billion to $68.70 billion. The Zacks Consensus Estimate for full-year revenues, which is pegged at $68.34 billion, lies above the company’s updated guidance range.

Earnings per share is anticipated to be $27.17 for 2021, compared with $26.70-$27.00 projected earlier. The Zacks Consensus Estimate for the company’s full-year earnings, which standsat $22.25 per share, lies below the company’s updated guidance range.

Zacks Rank

Lockheed Martin currently hasa Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Q3 Defense Releases

Boeing BA is slated to release its third-quarter 2021 results on Oct 27.

General DynamicsGD is scheduled to release its third-quarter 2021 results on Oct 27.

Northrop GrummanNOC is slated to release its third-quarter 2021 results on Oct 28.


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