Lockheed Martin (LMT, Financial) shares have taken a hit, dropping by 5.42% to a price of $581.29 following the release of its third-quarter earnings report. Although the company's earnings exceeded expectations, revenue fell short due to delays in F-35 jet deliveries.
Lockheed Martin (LMT, Financial) announced earnings of $6.80 per share for the third quarter, outperforming the anticipated $6.50 per share. However, sales reached only $17.1 billion, missing the forecasted $17.4 billion. The company attributes this shortfall to a $400 million gap caused by F-35 delivery delays, which it plans to recover in future quarters.
Looking forward, Lockheed Martin (LMT, Financial) has adjusted its 2024 earnings forecast to $26.65 per share, up from the previous range of $26.10 to $26.60. The company now expects annual revenue to hit $71.25 billion, narrowing its earlier projection of $70.5 billion to $71.5 billion.
A key highlight from the report is the company's operating margin of 12.5% and a free cash flow of $2.1 billion, which, despite a modest year-over-year sales growth of 1%, indicates strong performance in its operational efficiency. The company recorded a robust book-to-bill ratio of 1.43, driven by strong bookings in the space and missile sectors, signaling promising potential for future growth.
Lockheed Martin (LMT, Financial) has also announced a 5% increase in its dividend and approved a $3 billion share repurchase program. The company's significant $165 billion backlog in future contracts underscores its strategic importance in defense priorities, presenting investors with a stable income investment opportunity with growth potential.
From a valuation perspective, Lockheed Martin (LMT, Financial) is currently deemed "Modestly Overvalued" according to its GF Value of $507.33. Investors can explore the detailed GF Value analysis here.
The company has a market capitalization of approximately $138.55 billion, with a P/E ratio of 21.1 and a price-to-book ratio of 22.31. Its earnings growth over the past five years stands at 6.3%, indicating consistent performance, although certain profitability metrics like the operating margin have been in decline over the past five years. Nonetheless, Lockheed Martin's (LMT, Financial) financial strength remains robust, reflected by a strong Altman Z-Score of 4.09.
For investors looking for exposure to the aerospace and defense sector, Lockheed Martin (LMT, Financial) continues to offer a combination of steady income and potential for growth, backed by its extensive backlog and strategic importance in the industry.
