Lockheed Martin on Tuesday posted strong financial results in its first quarter buoyed by operating performance, a lower tax rate and a pension tailwind, and the company raised the outlook for its top and bottom lines in 2018.
Net income soared 47 percent to $1.2 billion, $4.02 earnings per share (EPS), from $789 million ($2.69 EPS) a year ago, with per share estimates soundly beating consensus estimates by 60 cents. Sales were up nearly 4 percent to $11.6 billion from $11.2 billion a year ago.
Segment operating margin jumped 160 basis points to 11.3 percent, with three of the company’s four business segments reporting gains, led by Rotary and Mission Systems due to the absence of a charge on an international air missile defense C4I system that hit the segment a year ago, as well as better cost performance on helicopter programs and higher sales related to training and logistics solutions. Last year’s first quarter earnings were also dented by a charge related to an international joint venture that did not recur this year.
Other program contributors to the company’s strong bottom line were the sensors and global sustainment, air and missile defense, the F-35 fighter, and combat aircraft.
Sales were also higher in three of the business segments, with Missiles and Fire Control leading the way followed by Aeronautics, and Rotary and Mission Systems. Revenue drivers included classified programs, the Long Range Stand Off and Joint Air-to-Surface Standoff Missile programs, F-35 production and sustainment, modernization activities on the F-16 and F-22 fighter programs, training and logistics solutions, integrated warfare systems and sensors, and the Aegis Combat System.
Based on the first quarter results and expectations for the rest of the year, Lockheed Martin increased its earnings and sales guidance for 2018. Earnings are now expected to range between $15.80 and $16.10 per share, up 60 EPS from the prior outlook based on stronger operating performance at Aeronautics, Missiles & Fire Control, and Rotary & Mission Systems, and a lower than expected tax rate.
