What to Expect From Lockheed Martin's Next Quarterly Earnings Report

Bethesda, Maryland-based Lockheed Martin Corporation (LMT), with a market cap of $111.9 billion, specializes in manufacturing and designing fighter aircraft and missiles, famed for its fighter aircraft like F-16 Falcon, F-22 Raptor, and F-35 Lightning. The defense powerhouse is gearing up to unveil its fiscal Q2 earnings for 2024 before the market opens on Tuesday, July 23.

Ahead of the event, analysts expect Lockheed Martin to report a profit of $6.45 per share, down 4.2% from $6.73 per share reported in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS estimates in its recent quarterly reports.

Despite its adjusted earnings for the last reported quarter declining 1.6% year over year to $6.33 per share, it beat the consensus estimates by 9.1%. The quarterly bottom-line dip was due to higher interest expenses and lower pension income, overshadowing gains from increased profits and a reduced share count.

For fiscal 2024, analysts expect Lockheed Martin to report an EPS of $26.17, down 5.9% from $27.82 in fiscal 2023. However, fiscal 2025 EPS is projected to grow 8.4% annually to $28.37.

LMT stock is up 2.9% on a YTD basis, underperforming the S&P 500 Index’s ($SPX) 14.8% returns but slightly outperforming the S&P Aerospace & Defense SPDR’s (XAR) 2.7% gains during the same time frame.

Lockheed Martin has capitalized on heightened global tensions, driving a robust 13.7% annual revenue surge to $17.2 billion in Q1. Yet, squeezed margins on certain programs due to supplier shortages and escalating costs have dampened profitability. Despite these challenges, the company remains proactive in strengthening supplier relations to improve quality and performance.

However, concerns loom as news of potential losses exceeding a billion dollars from classified projects in its missiles and fire control segment unsettles investors.

The consensus opinion on Lockheed Martin stock is moderately bullish, with a “Moderate Buy” rating overall. That’s based on 17 analysts covering the stock, with five advising a “Strong Buy” rating, 11 playing it safe with a “Hold” rating, and the remaining one having a “Strong Sell” rating. Over the past three months, a new “Strong Buy” recommendation has been added to the consensus.

The average target price for Lockheed Martin is $490.89, indicating a potential upside of 5.2% from the current price levels.

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