Defense giant Lockheed Martin (LMT) cleared expectations for its quarterly results Tuesday morning. LMT stock leaned toward a potential breakout.
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The maker of the F-22 and F-35 fighter jets has been a heavy supplier of missiles and other military equipment in Ukraine’s fight against Russia’s invasion over the past year. Lockheed Martin provided High Mobility Artillery Rocket Systems (HMARS) and ammunition, Javelin and Stinger missiles early in the assault. In February, U.S. officials denied requests for Army Tactical Missile systems (ATACMS), manufactured by Lockheed. And the Pentagon has refrained from sending Lockheed Martin and General Dynamics (GD)-made F-16 fighter jets in order to avoid engaging in direct conflict with Russia.
Meanwhile, China blacklisted Lockheed Martin and Raytheon (RTX) in February in retaliation for weapons sales to Taiwan.
On Monday, the White House notified Congress it planned to sell $259 million in F-16 equipment upgrades to Turkey, Reuters reported. The new, smaller package is separate from the proposed $20 billion deal of new jets and 80 modernization kits Turkey requested in October 2021.
Lockheed Earnings
Results: Lockheed Martin reported adjusted earnings of $6.43 per share, unchanged from last year. GAAP earnings, excluding mark-to-market investment gains, rose 2.6% to $6.61 per share. Net sales ticked up to $15.126 billion from $14.96 billion.
Cash flow from operations were $1.56 billion with free cash flow of $1.27 billion.
Expectations: Analysts polled by FactSet expected Lockheed Martin earnings to decline 6% to $6.05 per share Tuesday while revenue inched up to $15 billion from $14.96 billion a year ago. Lockheed Martin earnings and revenue growth accelerated the two prior quarters with mid-single digit gains.
Outlook: Lockheed guided full-year earnings between $26.60 per share and $26.90 per share on $65 billion to $66 billion in net sales. For the year, analysts see earnings jumping 24% to $26.91 per share as revenue edges down 0.36% to $65.746 billion.
LMT Stock
LMT stock is trading in a flat base with a 499.05 buy point according to MarketSmith. Shares are holding above their 50-day and 200-day moving averages and just shy of reclaiming their 10-day line. The current buy zone for the pattern extends to 524.
Lockheed Martin has a strong 85 EPS Rating, posting just one earnings decline in the past two years. Although its relative strength line is off highs Lockheed Martin still has a robust 86 RS Rating. LMT stock has a 90 Composite Rating out of a best-possible 99, which combines a number of technical indicators into one easy-to-read score.
LMT stock rose 1.1% to 489.64 premarket Tuesday following results. Shares are up 8.9% over the past three months but less than 1% so far this year.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
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