General Dynamics reported its second-quarter results early Wednesday. That followed Lockheed Martin's report on Tuesday, which beat earnings estimates and hiked its guidance in a big week for defense manufacturers. RTX and Northrop Grumman report early Thursday. L3Harris is on tap early Friday.
Lockheed Martin
Lockheed Martin reported a 3.3% increase in earnings to $6.85 per share, beating FactSet expectations of a 4% decline. Adjusted earnings rose 5.6% to $7.11 per share. Net sales increased 9% to $18.1 billion, which easily cleared estimates for $17.05 billion in revenue.
Lockheed said the F-35 remains a top priority and it recently delivered its first jet following the Technology Refresh 3 update. The company expects to meet its 2024 delivery forecast of 75 to 110 F-35 jets.
Lockheed also hiked its outlook on the results. The defense contractor now expects 2024 net sales to range from $70.5 billion to $71.5 billion, compared to its previous forecast of $68.5 billion to $70 billion in sales. Lockheed Martin lifted its earnings guidance to range from $26.10 to $26.60 per share, up from its prior outlook of $25.65 to $26.35 per share.
Meanwhile, Lockheed F-35 jet deliveries to the U.S. have resumed following a monthslong halt due to software delays, Reuters reported on Saturday. Lockheed and its suppliers have been upgrading the hardware and software for the F-35s to improve displays and processing power, as part of the Technology Refresh 3 (TR-3) program. Although the updated hardware has been installed, the software is lagging, Secretary of the Air Force Frank Kendall told Reuters. Although the jets do not have the required functionality, they are far enough along in the upgrades for the military to accept delivery, Kendall said.
Senior officials confirmed the Pentagon will continue to withhold some final payments for each jet until the enhancements are ready. Specific amounts were not disclosed.
So far, about $7 million of the final $100 million payment for each fighter has been withheld.
Elsewhere, Lockheed Martin believes it could potentially attract orders for 300 F-16 jets, with prospective customers for new-build aircraft from the Philippines, Thailand and Turkey, FlightGlobal reported Saturday. Turkey has expressed interest in purchasing 40 new-build F-16 jets and upgrading 79 of its in-service F-16s. Estimates from the U.S. Defense Security Cooperation Agency forecast the deal could be worth around $23 billion.
Analysts from Baird and Wells Fargo raised their price targets on the stock, to 519 and 525, respectively. TD Cowen upgraded Lockheed to buy, from hold, with a price target at 560.
Lockheed Martin stock leapt 5.6% Tuesday to extend above a buy zone for a flat base. Shares advanced another 2.8% Wednesday.
LMT stock first cleared the 473.54 buy point in early June and retook it last week.
Lockheed Martin shares rose 10.6% in 2024 through Tuesday.
General Dynamics
General Dynamics reported a 20.7% increase in earnings to $3.26 per share, but just missed expectations of 21.5% growth. Revenue jumped 18% to $12 billion to beat views for a 13% increase. The results marked three quarters of accelerating earnings and revenue growth.
Gulfstream delivered 37 aircraft for the quarter, increasing from 24 planes a year ago.
General Dynamics' aerospace segment revenue spiked 51% with 8% year-over-year order growth to $2.7 billion. Combat systems revenue jumped 19% and generated $3.4 billion of orders for the quarter, bringing the backlog to $16.7 billion.
General Dynamics stock retreated 3.3% Wednesday to fall below its 50-day line. Investors could use resistance above 302 as a potential buy point.
GD stock advanced 9.6% so far this year.
RTX
RTX earnings are expected to tick up 1 cent to $1.30 per share adjusted while revenue increases 5.3% to $19.29 billion.
Elsewhere, RTX on Monday announced it reached a memorandum of understanding to supply engines for the largest aircraft order in Philippine aviation history. Airline Cebu Pacific agreed to purchase up to 152 A321neo aircraft from Airbus for an estimated $24 billion. RTX's Pratt & Whitney business will supply GTF engines to power the aircraft.
The agreement covers firm orders for up to 102 A321neo single-aisle aircraft, as well as purchase rights for 50 additional jets in the A320neo family.
RTX stock is trading below a 108.65 buy point for a six-week flat base.
Still, RTX is trading just above its 50-day moving average. A strong move above the 50-day line would break a trendline and clear a short-term high of 105.46.
RTX stock jumped 24.8% in 2024.
Northrop Grumman
FactSet estimates an 11% Northrop Grumman earnings increase to $5.93 per share. Analysts predict revenue grows 4.6% to $10.02 billion.
BTIG initiated coverage of Northrop Grumman in late June, saying it expects the company to be one of the fastest-growing defense contractors through the remainder of the decade. The firm cited Northrop's exposure to high-growth end markets, such as space, as well as its involvement with multiple programs critical to national security as key drivers. Northrop also has strong free cash flow, which it largely returns to shareholders through buybacks and dividends, making it the most attractive long-term defense name, BTIG said.
BTIG has a buy rating and a 565 price target on Northrop Grumman stock.
NOC stock is trading in the bottom half of a flat base with a 490.60 buy point. However, Northrop is trading below its 50-day moving average and 200-day lines.
NOC stock retreated 5.5% so far this year.
L3Harris
L3Harris earnings are seen rising 7% to $3.18 per share. Experts predict revenue jumps 13% to $5.3 billion, which would mark its first decline in sales growth after six quarters of accelerating gains.
LHX stock is extended above a buy zone for a flat base.
Shares have advanced 14% in 2024.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
