Lockheed Martin Cashes in on Global Defense Boom With Record Orders

Lockheed Martin Corp. (NYSE: LMT ) stock rose Thursday after the defense contractor reported second-quarter results that topped Wall Street expectations and raised its full-year guidance on stronger sales, earnings and defense demand.

The company reported GAAP diluted earnings of $7.94 per share, beating the analyst consensus estimate of $7.09, according to Pro.

Revenue increased 11% year over year to $20.063 billion, exceeding the Street estimate of $19.344 billion.

Profit Rebounds As Prior-Year Charges Fade Net earnings climbed to $1.836 billion from $342 million a year earlier.

Consolidated operating profit rose to $2.479 billion from $748 million, while segment operating profit increased to $2.162 billion.

The improvement reflected the absence of $1.615 billion in program losses that weighed on results in the prior-year quarter.

All Four Business Segments Grow Aeronautics revenue rose 9% to $8.112 billion, driven by higher F-35 production.

Operating profit improved to $760 million from a loss of $98 million a year earlier.

Missiles and Fire Control revenue increased 19% to $4.101 billion as production ramped up for PAC-3, THAAD and the Precision Strike Missile.

Operating profit rose 24% to $594 million, while the operating margin expanded to 14.5%.

Rotary and Mission Systems revenue advanced 9% to $4.354 billion.

Operating profit reached $437 million, compared with an operating loss of $172 million a year earlier.

Space revenue increased 6% to $3.496 billion, while operating profit edged up 2% to $371 million.

Defense Spending Drives Growth Lockheed said higher demand from the United States and allied nations supported growth across all four business segments.

Increased spending on missile defense and munitions also contributed to stronger orders and sales.

The company continued investing in manufacturing capacity through partnerships with General Motors Defense in the U.S. and Rheinmetall in Europe.

Read Also: Lockheed Martin Unveils Patriot Missile That Could Cost Less Than Half the Current Interceptor as Ukraine, Middle East Conflicts Drive Demand Orders, Cash Flow And Guidance New orders totaled $65 billion during the quarter, resulting in a book-to-bill ratio of 3.2 and lifting backlog to a record $230.416 billion.

The backlog included a $35 billion multiyear THAAD interceptor contract.

The company delivered 19 F-35 aircraft, two F-16s, seven C-130Js and 16 government helicopters during the quarter.

Operating cash flow totaled $3.235 billion, while free cash flow reached $2.917 billion.

Capital expenditures were $318 million, research and development spending totaled $558 million, and dividend payments were about $800 million.

Cash and cash equivalents stood at $3.791 billion, while long-term debt totaled $20.538 billion.

Lockheed raised its full-year GAAP earnings guidance to a range of $29.95 to $30.65 per share from $29.35 to $30.25 per share, compared with the analyst consensus estimate of $29.86.

The company also increased its sales forecast to $79.75 billion to $81.75 billion from $77.5 billion to $80.0 billion, above the consensus estimate of $79.135 billion.

It raised projected free cash flow to between $7.0 billion and $7.2 billion and increased sales outlooks across all four business segments.

LMT Price Action: Lockheed Martin shares were up 11.62% at $574.10 at the time of publication on Thursday, according to Pro data.

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