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Earnings preview: Contracts to spur Lockheed Martin Q1 results

Defense contractor Lockheed Martin (NYSE: LMT) is scheduled to report its earnings results for the first quarter of 2019 on Tuesday before the market opens. Similar to the previous quarter, the company’s results are dependent on significant contracts wins from the US Department of Defense and its allies.

Segment-wise, higher volume from the F-35 and the F-16 programs could drive sales of the Aeronautics segment higher. The positivity in tactical and strike missiles programs, as well as integrated air and missile defense programs, could drive Missiles and Fire Control sales higher.

The company’s Space segment is expected to show an increase in sales backed by Orion program, strategic and missile defense programs, and government satellite programs. However, the negativity surrounding Sikorsky helicopter programs could hurt sales of Rotary and Mission Systems segment, which remained concerned on the volume for Black Hawk production.

Picture Courtesy: Lockheed Martin / Flickr.com

Analysts expect Lockheed’s earnings to increase by 8% to $4.34 per share and revenue to rise by 7.60% to $12.52 billion for the first quarter. In comparison, during the previous year quarter, the company posted a profit of $4.02 per share on revenue of $11.63 billion. The company has beat analysts’ expectations for three times in the past four quarters.

For the fourth-quarter, Lockheed Martin reported a profit compared to a loss in the prior year quarter, which included a one-time charge related to the estimated impacts of the tax reform. The company posted year-over-year sales increases in three of its business segments.

For the full year 2019, the company had expected net sales in the range of $55.75 billion to $57.25 billion and earnings in the range of $19.15 to $19.45 per share. Business segment operating profit was expected to be in the range of $6 billion to $6.15 billion.

Shares of Lockheed Martin opened lower on Monday but changed course to the green territory. The stock has fallen over 10% in the past year while it has risen over 11% in the past three months.

 

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