Lockheed Martin on Tuesday posted double-digit percentage gains to its top and bottom lines in the second quarter, driven by strong operating results across its business segments. The company raised guidance for sales, earnings and cash for 2020.
Lockheed Martin was able to shrug off negative impacts from the ongoing COVID-19 pandemic, which it said impacted each of its business areas and led to higher costs, supplier delivery delays, continued teleworking and altered work schedules, travel restrictions and the inability to access some work locations. The company said its and the government’s “proactive efforts” to help suppliers mitigated supply chain disruptions and it also benefited from favorable contract timing and strong operating performance.
From the time COVID-19 was declared a pandemic through the end of June, Lockheed Martin accelerated $1.3 billion in payments to its suppliers to minimize supply chain disruptions. These funds came from accelerated progress payments made by the Defense Department and from cash on hand, the company said.
Net income climbed nearly 13% to $1.6 billion, $5.79 earnings per share (EPS), from $1.4 billion ($5 EPS) a year ago, topping consensus estimates by seven pennies per share.
The only dent in the company’s earnings was a $96 million (34 cents EPS) non-cash charge related to a decision to an agreement to sell its interest in the Advanced Military Maintenance Repair and Overhaul Center joint venture. Lockheed Martin said it is selling its stake for $307 million.
Sales in the quarter rose more than 12% to $16.2 billion from $14.4 billion a year ago.
All four of Lockheed Martin’s business segments contributed to the top line increases, led by the Aeronautics segment, which benefited from F-35 production, development and sustainment, and classified development contracts. Other contributors included PAC-3, THAAD, the High-Mobility Artillery Rocket System, the Seahawk and VH-92A helicopter programs, the Next Generation Overhead Persistent Infrared satellite program, and hypersonic development programs.
In April, the Air Force selected Raytheon over Lockheed for production of the service’s next-generation nuclear cruise missile. However, in March, the Navy awarded Lockheed a $601 million modification to exercise contract options for submarine-launched ballistic missile Trident II D5 production and deployed systems support.
