Lockheed Martin Stock Falls After F-35 Sales Decline

Lockheed Martin stock falls as first-quarter earnings of F-35 stealth fighter program saw a decline in sales, while the defense giant raised its full-year outlook Tuesday. Lockheed stock eased.

U.S. weapons maker Lockheed Martin Corp increased its outlook for 2021 sales and profit as it reported better-than-expected quarterly profits on Tuesday, helped by higher sales and profits at its unit which makes ships and helicopters.

Though the maker of the F-35 fighter jet increased the midpoint of its full-year revenue outlook slightly to $68 billion, the estimate is below Wall Street’s average estimate of $68.17 billion.

The company’s Aeronautics segment reported 17 deliveries of its F-35 jets in the quarter, down from 22 a year earlier. Lockheed plans to deliver between 133 and 139 of the jets this year, said Possenriede.

Net earnings for the quarter which ended on March 28 rose from $1.7 billion in the same period a year ago, to $1.8 billion, or $6.56 per share, beating analyst estimates of $6.31 per share.

Though net sales in the quarter rose 3.9% to $16.26 billion, they were below analysts’ expectation of $16.33 billion.

Lockheed Stock

Shares fell 1.1% to 387.47 on the stock market today. Lockheed stock is working on a 402.48 cup-base buy point. Top F-35 subcontractor Northrop Grumman (NOC) was flat, and engine supplier Raytheon Technologies (RTX) lost 2.5%.

Boeing (BA) will report quarterly results next week along with Northrop and General Dynamics (GD).

Lockheed Martin raises outlook

Full-year EPS of $26.40 – $26.70, up from prior guidance of $26.00 – $26.30 and above consensus views for $26.33, on revenue of $67.3 billion – $68.7 billion, up from prior guidance of $67.1 billion – $68.5 billion and largely in line with consensus for $68.14 billion.

Missiles have been a major revenue stream in recent quarters. In January, the defense contractor said it sees hypersonic weapon sales hitting $1.5 billion this year and sees that figure doubling to $3 million by 2025. That’s up from an estimated $1 billion in 2020 and $600 million in 2019.

But Lockheed’s hypersonic missile prototype failed to launch last week in what was supposed to be its first flight test with the Air Force.

In August 2018, the Air Force awarded Lockheed a $480 million contract to design a hypersonic missile prototype for the ARRW program. The Air Force had said it was using “rapid prototyping” to bring these weapons to a “capability in 2021.”