Lockheed Martin (LMT -6.12%) exceeded earnings expectations but fell short on revenue due to F-35 delivery delays, leading to a 5% drop in shares as of 10:30 a.m. ET.
A Solid Quarter
In Q3, Lockheed Martin, the largest defense contractor, reported earnings of $6.80 per share on $17.1 billion in sales, slightly below Wall Street’s expectations of $6.50 per share on $17.4 billion.
F-35 delays affected sales by $400 million, but the company anticipates recovery in future quarters. It raised its 2024 earnings forecast to $26.65 per share and narrowed annual revenue expectations to $71.25 billion.
CEO Jim Taiclet stated, “We are raising our outlook for full-year 2024 sales and earnings due to strong performance and confidence in near-term results.”
Is Lockheed Martin a Buy?
Though sales growth was only 1% year-over-year, there are no immediate risks for long-term investors. The company’s operating margin was 12.5%, exceeding expectations, and free cash flow of $2.1 billion was significantly higher than the $1.3 billion forecasted.
Additionally, strong orders in the space and missile sectors led to a book-to-bill ratio of 1.43, positioning Lockheed Martin favorably for the future.
The company raised its dividend by 5% and authorized $3 billion for share buybacks. With a $165 billion backlog in business, Lockheed Martin remains a solid investment choice with stable income and growth potential.
`
