Lockheed Martin (NYSE:LMT) shares are down 2% in premarket trading Tuesday after the company reported weaker-than-expected Q1 net sales.
Lockheed reported first quarter net sales of $14.96 billion, down 8% YoY and missing the consensus estimates of $15.55 billion. The global security and aerospace company reported EPS of $6.44 in the period, down from $6.56 in the year-ago quarter.
Backlog was reported at $134.23 billion, down 8.9% YoY.
Cash flow from operations stood at $1.41 billion, down 19% YoY and below the consensus projection of $1.58 billion. Operating profit totaled $1.93 billion, down 11% YoY and also below the estimates of $2.04 billion. Lockheed reported an aeronautics operating profit of $679 million, down 2% YoY and short of the expected $685.3 million.
Missiles and Fire Control business generated an operating profit of $384 million in the quarter, down 3% YoY and compared to the analyst estimates of $368.9 million.
Rotary and Mission Systems operating profit came in at $348 million, down 20% YoY and compared to the $398.3 million consensus. Space operating profit stood at $245 million, up 7.9% YoY and above the estimates of $241.4 million.
For the full year, Lockheed expects EPS of roughly $26.70, almost in line with the expected $26.77 per share. The company expects FY net sales of around $66 billion, compared to the analyst estimates of $66.13 billion.
“Lockheed Martin had a solid start to the year by delivering margin expansion and free cash flow above our expectations despite recent Covid-surge impacts on our operations and supply chain,” the company said.
Vertical Research Partners analyst Robert Stallard commented:
“While the 1Q numbers are pretty much as we anticipated in our preview – revs soft, margin offset, no change to guidance – we doubt if investors will be too focused on these actual results. Instead, we think there will be much more interest in what Lockheed says about the future. It is the first US defense company to report results since the Ukraine invasion began, and we think there will be a lot of questions about what the short, medium and long term implications could be from the increased domestic and export demand for defense products and services.”
By Senad Karaahmetovic