Lockheed, Raytheon Cite Afghanistan Withdrawal Impact; Defense Stocks GD, Northrop Earnings Due

Lockheed Martin’s (LMT) third quarter revenue falls short of Wall Street expectations and Raytheon Technologies (RTX) earnings beat. Defense stocks Northrop Grumman (NOC) and General Dynamics (GD) will report third-quarter earnings this week.


LMT Stock Tumbles After Revenue Miss

Estimates: FactSet analysts saw Lockheed earnings falling 68.5% to $1.97 per share. But revenue is seen edging up 3.8% to $17.1 billion.

Results: Lockheed earnings fell to $2.21 on revenue of $16.03 billion.

Aeronautics segment sales fell 2% to $6.57 billion on lower net sales in the F-35 program.

Lockheed Martin’s biggest moneymaker is its F-35 fighter jet. But in recent quarters its missiles and fire control unit has been its fastest-growing segment. However, that segment saw its revenue fall by 6% to $2.78 billion.

Revenue at the space unit fell 5% to $2.7 billion. Lockheed said the drop in sales was partially offset by its hypersonic weapons development. The company has six hypersonic weapons programs and CEO Jim Taiclet told analysts that he “multiple” programs starting production between 2023 and 2026.

The company is developing hypersonic weapons and opened a new factory in Alabama for hypersonic missile production earlier this month. Unlike ballistic missiles, which fly in a predictable arc, hypersonic weapons fly five times the speed of sound — or Mach 5 — in unpredictable flight paths, making them difficult to defend against.

Outlook: Lockheed sees full-year sales of $67 billion, down from a previous outlook of $67.3 billion to $68.7 billion, due to the withdrawal from Afghanistan and a drop in F-35 production.

Stock: Shares tumbled 11% to 334.57 on the stock market today. LMT stock is running up the right side of a consolidation with a 397.09 entry point, according to MarketSmith analysis.

Raytheon Technologies Earnings Beat

Estimates: Raytheon earnings per share are seen soaring 88% to $1.09 with revenue up 11% to $16.4 billion.

Results: Raytheon reported EPS of $1.26 on revenue of $16.2 billion.

During the analyst call, CEO Greg Hayes said that the U.S. withdrawal from Afghanistan has a $75 million impact on the company’s sales.

Stock: Shares fell 2.5% to 89.07. RTX stock fell out of buy range following earnings, after breaking out of a flat base with an 89.98 entry point earlier this month.

General Dynamics Earnings

Estimates: Analysts see General Dynamics earnings edging up 3% to $2.98 with revenue up 4.3% to $9.8 billion.

Results: Check back before the market opens Wednesday.

Stock: Shares were down 2.8% to 202.16 GD stock is currently in buy range after breaking out of a flat base with a 206.56 entry point.

Boeing (BA) will also report Q3 results early Wednesday.

Northrop Grumman Earnings

Estimates: Analysts see Northrop earnings per share up 2% to $5.99 but revenue dipping 0.7% to $8.93 billion.

Like Lockheed, Northrop is working on its own hypersonic weapons. Northrop and Raytheon Technologies (RTX) successfully completed the first powered test flight of their Hypersonic Air-Breathing Weapon Concept for the Air Force in late September.

Results: Check back before the market opens Thursday.

Stock: Shares slid 2.7% to 395.82 Tuesday. NOC stock is currently extended out of buy range after breaking out of a flat base with a 379.13 entry point.

Follow Gillian Rich on Twitter for defense news and more.


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