Before the opening bell today, Lockheed Martin (LMT) posted third-quarter results that handily beat analysts’ expectations. LMT had been on a downward slide since mid-August; is this announcement what the company needs to turn itself around? Let’s find out.
The defense contractor reported 14.9% annual sales growth and 45.5% earnings growth for the third quarter. Net sales were $11.6 billion, up from $10.1 billion in Q3 2015. Net earnings from continuing operations were $1.1 billion, or $3.61 per share, up from $756 million, or $2.42 per share a year ago. Lockheed Martin reported a $1.2 billion gain resulting from the earlier spinoff of its information systems business.
Lockheed Martin also lifted its FY 2016 view. The company now expects to bring in between $50.0 billion and $51.5 billion in net sales, with earnings per share ranging between $12.15 and $12.45. Back in July, Lockheed Martin was targeting between $45.0 billion and $46.2 billion in net sales and between $11.15 and $11.45 EPS. The revised guidance is also above the Street view of $11.77 EPS on $46.36 billion in revenue.
Wall Street celebrated these announcements, pushing LMT shares higher. I expect that LMT will move higher from here, especially now that analysts will be scrambling to revise their Q4 and 2016 estimates higher.
Lockheed Martin is the rare kind of stock that packs a one-two punch: It earns an B-rating in Portfolio Grader, and a B-rating in Dividend Grader. It offers a 2.8% annual dividend yield, and trades at a reasonable 18 times forecasted earnings. For these reasons and more, I currently recommend LMT in my most popular premium newsletter: Blue Chip Growth.