F-35 maker Lockheed Martin reaffirmed 2022 outlook after delivering a mixed report for the first quarter, amid fresh Covid-19 headwinds. LMT stock fell near a buy point Tuesday.
Lockheed and the Pentagon are in talks about raising weapons production for Ukraine, the company said. But the defense contractor has yet to increase output. Lockheed makes the anti-tank Javelin missiles, being used by Ukrainian soldiers.
Lockheed Martin Earnings
Estimates: Lockheed Martin earnings were seen falling 7% to $6.11 per share on a 4% revenue drop to $15.579 billion, according to FactSet.
Results: Lockheed earnings came in at $6.44 a share, with revenue at $14.96 billion. Year over year, earnings fell 2% and revenue fell 8%. The Covid omicron variant and inflation weighed on its supply chain and operations, the company said.
While revenue rose 2% in Aeronautics, Lockheed's largest segment, profits fell 2%. Revenue fell in other segments — Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS) and Space.
Lockheed delivered 26 F-35 fighter jets in Q1 vs. 17 a year ago. But it reported lower net sales for the F-35 program "due to lower net favorable profit adjustments and volume on production contracts."
Outlook: The defense giant still sees full-year EPS of $26.70 a share and sales of $66 billion. That's roughly in line with consensus, which hasn't been updated for the Q1 EPS beat.
The company expects higher defense spending due to the Russia-Ukraine war.
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LMT Stock
Shares of Lockheed Martin lost 1.6%, near 460, in choppy trade on the stock market today. LMT stock sits less than 5% below a 480.09 flat-base buy point with a rising relative strength line. The flat base formed after LMT stock and other defense names soared in late February on Russia's Ukraine invasion.
Lockheed Martin stock has an RS Rating of 93 out of a best-possible 99, while its EPS Rating is 88.
General Dynamics gained 1.1% and Raytheon Technologies rose 0.2% , with both near buy points. Boeing stock climbed 3.4%, while GE stock advanced 1.7%.
General Electric and Raytheon report April 26. Boeing and General Dynamics April 27, and Northrop Grumman April 28.
F-35 Joint Strike Fighter
The F-35 Joint Strike Fighter program counts as Lockheed Martin's biggest. It made up more than a quarter of LMT's 2021 sales but continued to be impacted by the Covid-19 pandemic.
In mid-March, Bloomberg reported that the U.S. will buy fewer F-35 fighter jets in 2023. Lockheed Martin stock tanked briefly on the news.
Following the Russian-Ukraine war, Germany said it would buy 35 F-35s. Canada will purchase 88.
Defense Stocks Jumped On Russia-Ukraine War
Defense stocks surged following Russia's Feb. 24 invasion of Ukraine, while stocks at large fell.
Surprising defense experts, Moscow hit more resistance than expected in the battle against its neighbor.
Following the Russian invasion of Ukraine, Germany and its NATO allies are sending European and U.S.-built weapons to Kyiv. Those weapons include Lockheed Martin's Javelin anti-tank missiles and Raytheon's Stinger anti-aircraft missiles.
The U.S. also vowed more than $3 billion in military aid to Ukraine, including Javelin missiles.
On Feb. 13, Lockheed Martin ended its proposed acquisition of Aerojet Rocketdyne amid regulatory concerns.
