A good 2019 keeps rolling for Lockheed Martin, which on Tuesday reported strong increases in earnings and sales in its second quarter, building on handsome gains in the first quarter.
The results led the company to increase its guidance for sales, earnings, and cash this year.
Net income in the quarter increased 22 percent to just over $1.4 billion, $5 earnings per share (EPS), from just under $1.2 billion ($4.05 EPS) a year ago. Each of the company’s operating segments contributed to the gain and the results also benefited from a severance charge a year ago that didn’t recur.
The earnings results beat consensus estimates by $0.16 per share.
Sales increased 8 percent to $14.4 billion from $13.4 billion a year ago.
Among its many contracts, Lockheed Martin is competing with Raytheon to mature designs for the Pentagon’s next-generation Long-Range Standoff Weapon (LRSO) nuclear-tipped, air-launched cruise missile. The contracts, awarded in 2017, are each worth about $900 million. The Air Force has said it plans to buy roughly 1,000 LRSO missiles, which it plans to start deploying in the late 2020s.
Through the first two quarters of 2019, Lockheed Martin’s sales are up 15 percent to $28.8 billion and net income is up 35 percent to $3.1 billion, leading the company to again raise its guidance for the year. Sales this year are now forecast to be between $58.3 billion and $59.8 billion, a $1.5 billion increase from the prior guidance in April. Each of the company’s segments are contributing to the improved outlook.
The higher sales, combined in part with better than expected performance and to a lesser extent a lower tax rate, led the company to increase its segment operating income guidance by $225 million to between $6.3 billion and $6.5 billion. Per share earnings are now forecast to be 80 cents higher at between $20.85 and $21.15.
Operating cash flow is now projected to be $100 million higher to at least $7.6 billion.
