Lockheed Martin’s profit did not meet investors’ hopes
2023.01.24 09:10
Lockheed Martin’s profit did not meet investors’ hopes
By Ray Johnson
Budrigannews.com – Lockheed Martin Corporation, a manufacturer of weapons in the United States (NYSE:) despite a generous defense budget helping it beat fourth-quarter estimates, on Tuesday forecast annual profit below expectations from Wall Street.
In 2023, the defense contractor predicted earning between $26.60 and $26.90 per share. Refinitiv says that analysts have estimated $26.96 on average.
Pre-market trading saw little change for the shares, which were up 1% to $446.69.
In an interview, Lockheed CEO Jim Taiclet stated, “We signaled way ahead of time that 2023 was going to be kind of a steady state year from a revenue perspective.” He also stated that he aimed to increase free cash flow per share by 5% in 2023.
The pandemic’s snags in the supply chain have reduced defense suppliers’ profit margins, but those constraints are now lessening despite the companies’ continued struggle with labor shortages.
After reaching a peak when the United States and its allies increased their budgets in response to Russia’s invasion of Ukraine last year, analysts have expressed concern that defense spending will slow in 2023.
Concerns about the near-term outlook for defense companies like Lockheed and Raytheon Technologies (NYSE:) have also been raised by the election of Kevin McCarthy as the speaker of the United States House of Representatives and his promise to reduce spending. Northrop Grumman Corporation (NYSE:), which get a lot of their money from the government of the United States.
Compared to market estimates of $65.74 billion, Lockheed predicted revenue between $65 billion and $66 billion in 2023.
The aeronautics unit, Lockheed Martin’s largest, saw a 7 percent increase in net sales to $7.64 billion in the fourth quarter. However, the segment’s operating margin decreased from 11.5 percent to 10.7 percent from the previous year.
For the three months ended December 31, Lockheed Martin, based in Bethesda, Maryland, reported adjusted net income of $7.79 per share, exceeding analysts’ estimates of $7.39 per share.
It reported net sales of $18.99 billion in the fourth quarter, exceeding expectations of $18.27 billion.
