Post Earnings Coverage as Lockheed Martin’s Quarterly Sales Jumped 6.6%

Upcoming AWS Coverage on Raytheon

LONDON, UK / ACCESSWIRE / April 28, 2017 / Active Wall St. announces its post-earnings coverage on Lockheed Martin Corp. (NYSE: LMT). The Company posted its first quarter fiscal 2017 results on April 25, 2017. The aerospace and defense Company surpassed earnings expectations and also increased its sales guidance for FY17. Register with us now for your free membership at:

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One of Lockheed Martin’s competitors within the Aerospace/Defense Products & Services space, Raytheon Co. (NYSE: RTN), is expected to report its fiscal quarter ending March 2017 earnings results on April 27, 2017 before market open. AWS will be initiating a research report on Raytheon following the release of its next earnings results.

Today, AWS is promoting its earnings coverage on LMT; touching on RTN. Get our free coverage by signing up to:

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Earnings Reviewed

For the three months ended March 26, 2017, Lockheed Martin reported net sales of $11.06 billion compared to $10.37 billion in Q1 2017. The Company’s sales numbers came in below analysts’ consensus of $11.2 billion.

For Q1 2017, Lockheed Martin’s net earnings from continuing operations were $763 million, or $2.61 per share, compared to $806 million, or $2.61 per share, in Q1 2016. The Company’s Q1 2017 net earnings from continuing operations included a $120 million charge, for a loss program to design, integrate, and install an integrated air missile defense C4I system for an international customer, and a $64 million charge, which represents the Corporation’s portion of a noncash asset impairment charge recorded by an international equity method investee. These charges had the effect of reducing net earnings by $114 million, or $0.39 per share. On an adjusted basis, the Company reported earnings of $3.00 per share, which surpassed Wall Street’s estimates of $2.76 per share.

Lockheed Martin ended Q1 2017 with backlog of $93.5 billion compared to backlog of $96.2 billion at the end of Q4 2016.

Segment Results

For Q1 2017, Lockheed Martin’s Aeronautics’ net sales increased 8% on a y-o-y basis to $4.11 billion. The increase was primarily attributable to higher net sales for the F-35 program due to increased volume on aircraft production and sustainment activities and the F-16 program due to higher volume on aircraft modernization programs. These increases were partially offset by a decrease in net sales for the C-5 program due to one less aircraft delivery and lower sustainment activities. The Aeronautics’ operating profit in Q1 2017 totaled $436 million, up 4% on a y-o-y basis.

For Q1 2017, Lockheed Martin’s Missiles and Fire Control (MFC) segment’s net sales came in at $1.49 billion, up 4% compared to net sales of $1.43 billion in Q1 2016. The increase was attributable to higher net sales for air and missile defense programs due to increased deliveries on certain programs and for fire control programs due to increased deliveries. These increases were partially offset by a decrease in net sales for tactical missiles programs due to fewer deliveries. MFC’s operating profit in the reported quarter was $219 million, marginally below the operating profit of $22 million in the year ago same period.

Lockheed Martin’s Rotary and Mission Systems (RMS) division net sales in Q1 2017 increased 3% to $3.10 billion compared to net sales of $3.00 billion in Q1 2016. The increase was primarily attributable to higher net sales of about $280 million due to certain adjustments recorded in 2016 required to account for the November 06, 2015 acquisition of Sikorsky. This increase was partially offset by a net decrease of approximately $100 million primarily driven by fewer deliveries of helicopters and a decrease of about $65 million at C4ISR and Undersea Systems and Sensors (C4USS) programs and training and logistics services programs due to volume. RMS’ operating profit in the reported quarter declined 53% on a y-o-y basis to $108 million. The decline in the segment’s operating profit was driven by $110 million for C4USS programs due to a $120 million charge for performance matters on the international contract, EADGE-T and approximately $25 million for training and logistics services programs due to lower risk retirements. Adjustments not related to volume, including net profit booking rate adjustments, were about $115 million lower in Q1 2017 on a y-o-y basis.

For Q1 2017, Lockheed Martin’s Space Systems’ segment net sales surged 11% to $2.36 billion compared to net sales of $1.13 billion in Q1 2016. Space Systems’ operating profit in the reported quarter jumped 18% to $288 million compared to operating profit of $244 million in the year ago comparable period. Total equity earnings recognized by Space represented about $80 million, or 28% of the segment’s operating profit, in Q1 2017 compared to approximately $50 million, or 20%, in Q1 2016.

Cash Deployment Activities

During Q1 2017, The Company generated cash from operations of $1.7 billion in both Q1 2017 and Q1 2016. For the reported quarter, Lockheed Martin repurchased 1.9 million shares for $500 million compared to 2.4 million shares for $501 million in Q1 2016. The Company paid cash dividends of $544 million compared to $533 million in the prior year’s same quarter and capital expenditures of $170 million compared to $151 million in Q2 2016.

On April 26, 2017, Lockheed Martin’ board of directors has authorized a Q2 2017 dividend of $1.82 per share. The dividend is payable on June 23, 2017, to holders of record as of the close of business on June 01, 2017.

Outlook

For FY17, Lockheed Martin is forecasting to generate revenues in the range of $49.5 billion to $50.7 billion, higher compared to the previously announced range of $49.4 billion to $50.6 billion. The Company is expecting earnings to be in the band of $12.15 to $12.45 per share for FY17.

Stock Performance

On Thursday, April 27, 2017, the stock closed the trading session at $271.14, marginally up by 0.29% from its previous closing price of $270.35. A total volume of 953.76 thousand shares have exchanged hands. Lockheed Martin’s stock price advanced 7.07% in the last three months, 10.28% in the past six months, and 19.26% in the previous twelve months. Furthermore, since the start of the year, shares of the Company have gained 9.23%. The stock is trading at a PE ratio of 21.75 and has a dividend yield of 2.68%.

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