A busy week of defense industry earnings got off to a mixed start, as Lockheed Martin and RTX fell Tuesday. General Dynamics follows on Wednesday, with Northrop Grumman, L3Harris and Textron reporting on Thursday. Lockheed Martin stock and RTX shares have rallied to record highs this year.
Lockheed Martin reported adjusted earnings of $6.84 per share on 1% revenue growth to $17.1 billion. FactSet expected about a 4% decline in earnings to $6.50 per share on 3% revenue growth to $17.38 billion.
Lockheed reported sales growth for its missiles and fire control, as well as its rotary and mission systems. Space sales and aeronautics sales declined slightly.
Lockheed Martin now expects net sales around $71.25 billion for 2024, narrowing from its previous range of $70.5 billion to $71.5 billion. The company lifted its earnings guidance to about $26.65 per share, up from the prior outlook of $26.10 to $26.60 per share. Lockheed guided free cash flow around $6.2 billion, narrowing from its last forecast for $6 billion to $6.3 billion.
The company board at the beginning of the month authorized a $3 billion stock buyback plan, increasing its total repurchase program to $10.3 billion.
Lockheed Martin also increased its quarterly dividend by 5% to $3.30 per share.
Lockheed Martin stock retreated 6.1% Tuesday to fall below its 50-day line. Prior to earnings, shares were trading near a 614.48 buy point for a three-weeks-tight pattern, according to a weekly chart on MarketSurge. LMT stock has rallied 27% so far this year and is trading near all-time highs.
RTX
RTX reported a 16% increase in earnings to $1.45 per share adjusted on 6% revenue growth to $20.09 billion adjusted.
FactSet expected earnings of $1.34 per share adjusted on 4.7% sales growth to $19.84 billion.
Collins Aerospace sales rose 6% while Pratt & Whitney revenue increased 14%. Raytheon revenue eased 1%.
RTX hiked its adjusted earnings outlook to range from $5.50 to $5.58 per share, up from $5.35 to $5.45 per share. The defense contractor increased its adjusted sales forecast to range from $79.25 billion to $79.75 billion. It previously guided adjusted sales between $78.75 billion and $79.5 billion.
RTX averaged 7% earnings growth over the last three quarters on 10% revenue growth.
The results come after RTX last week reached a major settlement agreement to resolve a bribery probe and fraud charges. RTX on Oct. 16 agreed to pay more than $950 million related to the federal probes, which alleged the contractor defrauded the government and paid bribes to secure business with Qatar. The Department of Defense reported that RTX subsidiary Raytheon provided untruthful pricing data when negotiating contracts with the DOD and double-billed on a weapons maintenance contract. Raytheon also allegedly paid bribes to a high-level official at the Qatar Emiri Air Force between 2012 and 2016 in an effort to win defense contracts.
The various settlements total more than $950 million. RTX in July said it had set aside $1.24 billion for estimated settlement costs.
RTX stock ticked down a fraction Tuesday. The stock climbed about 2% premarket.
Shares are extended above a flat-base buy zone following a late July breakout.
RTX spiked 49% in 2024 and is trading at record highs.
Defense Stocks
Among other upcoming defense reports, LHX stock is trading just below a buy zone, from a 245.59 buy point for a flat base. Shares broke out at the beginning of October and are up more than 16% this year.
Textron is working to start up the right side of a six-month base pattern.
General Dynamics is trading near record highs, above a 302.75 flat base buy point.
FactSet expects defense contractors to report increases in both earnings and revenue. Northrop is the outlier, expected to report a 1.6% decline in earnings on 4.2% revenue growth.
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