Lockheed Martin records stronger than expected profit in the first quarter

Lockheed Martin Corporation (NYSE: LMT) said on Tuesday that its quarterly profit came out stronger than expected. The American company attributed the success to its aeronautics business that reported upbeat sales in the first quarter. Lockheed Martin is widely known as the maker of F-35 fighter jets.

The Bethesda-headquartered aerospace and defence company cited the economic blow from the Coronavirus pandemic as it slashed its guidance for 2020.

Lockheed Martin’s Financial Guidance For 2020

In its previous guidance, Lockheed expected to generate £51 billion to £52.25 billion in sales in fiscal 2020. Downwardly revising its sales outlook, the company said that it now forecasts £50.50 billion to £52 billion in full-year sales.

In terms of earning per share, however, Lockheed maintained its guidance at £19.35 in 2020.

According to the company, COVID-19 that has infected more than 794,000 people in the U.S so far and has caused over 42,500 deaths, weighed on its supply chain and disrupted production that pushed it into cutting its sales forecast for 2020.

As per analysts, on the other hand, the United States’ defence sector is less vulnerable to the ongoing health crisis, thanks to its stable cash flows as compared to the other industrial sectors.

Pentagon has recently taken effective measures to support the defence industry during the health crisis. Such measures included its deal with the defence contractors to increase interim payments and handle expenses ascribed to quarantined employees. Stable demand combined with Pentagon’s additional payments to the defence contractors for sick time is likely to shield this sector against the economic blow from COVID-19.

Lockheed Martin was reported trading 1% up in premarket trading on Tuesday.

Lockheed Martin’s Q1 Financial Results

At £1.40 billion (£4.95 per share), Lockheed’s net quarterly earnings came slightly stronger than £1.38 billion (£4.87 per share) that was recorded in the same quarter last year. Analysts had anticipated the company to make £4.72 of earnings per share in the first quarter.

On the revenue front, the company posted a 9.2% increase to £12.73 billion that beat experts’ forecast of £12.27 billion in Q1.

Lockheed Martin is currently trading at £310 per share that translates to around 5% decline in 2020 so far. In late March, the stock dropped to as low as £225 per share.

The U.S aerospace, security, defence, and advanced technologies company recorded an around 50% increase in the stock market last year.

Lockheed Martin is currently valued at £87.33 billion and has a price to earnings ratio of 17.35.