Lockheed Martin (LMT) shares fell after the company reported mixed Q3 results.
Net sales rose 1.3% year-over-year to $17.104 billion, below the expected $17.351 billion. Adjusted EPS was $6.84, up from $6.77 last year, beating the consensus of $6.50.
Gross margin increased by 0.24% to 12.4%, with an operating profit of $2.14 billion and a margin rise of 0.41% to 12.5%.
Aeronautics sales were $6.487 billion (down 3% YoY) with a 10.2% operating margin. Missiles and Fire Control sales rose 8% YoY to $3.175 billion, with a margin of 14.4%. Rotary and Mission Systems sales increased 6% to $4.367 billion, though its margin fell to 11.1%. Space sales declined 1% YoY to $3.075 billion, but the margin improved to 8.8%.
For the first nine months, Lockheed generated $5.949 billion in operating cash flow, compared with $5.555 billion last year.
By the end of the quarter, LMT’s backlog was $165.693 billion, a 3.1% increase since December 31, 2023. The company returned $1.6 billion to shareholders through dividends and buybacks.
Dividend: LMT announced a Q4 dividend of $3.30 per share, up $0.15 from the previous payment, to be paid on December 27 to shareholders on record as of December 2.
Also, the board authorized an extra $3 billion for stock buybacks, raising the total to $10.3 billion.
Lockheed’s CEO, Jim Taiclet, said they are optimistic about 2024 sales, profit, EPS, and cash flow, citing strong results so far.
Revised FY24 Outlook: Lockheed narrowed sales guidance to ~$71.25 billion, slightly above the consensus of $71.05 billion, and raised EPS guidance to ~$26.65, compared to the consensus of $26.38.
LMT now expects segment profit of $7.475 billion, operating cash flow of $7.95 billion, and free cash flow of $6.2 billion.
Price Action: LMT shares fell 4.91% to $584.45 as of Tuesday.
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