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A month has gone by since the last earnings report for Lockheed Martin (LMT). Shares have added about 6.3% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Lockheed due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Lockheed Beats on Q2 Earnings, Lowers '25 EPS View
Lockheed Martin Corporation reported second-quarter 2025 adjusted earnings of $7.29 per share, which beat the Zacks Consensus Estimate of $6.49 by 12.3%. The bottom line increased 2.5% from the year-ago quarter's reported figure of $7.11.
Including one-time items, the company reported GAAP earnings of $1.46 per share, lower than the prior-year quarter’s recorded earnings of $6.85.
The year-over-year deterioration in earnings was mainly due to lower consolidated operating profit generated in the second quarter of 2025 compared to the prior-year quarter.
Net sales were $18.16 billion, which missed the Zacks Consensus Estimate of $18.56 billion by 2.2%. The top line, however, inched up 0.2% from $18.12 billion reported in the year-ago quarter.
The year-over-year improvement was driven by higher sales growth registered by LMT’s business segments, except Rotary and Missions Systems.
LMT’s backlog as of June 29, 2025, was $166.53 billion compared with $172.97 billion as of March 30, 2024.
Our model projected a backlog worth $174.48 billion for the second quarter of 2025.
The Aeronautics segment accounted for $52.17 billion of the total backlog amount, while the Missiles and Fire Control segment contributed $40.25 billion. The Rotary and Mission Systems segment contributed $38.58 billion, while the Space unit accounted for $35.53 billion.
Aeronautics: Sales increased 2% year over year to $7.42 billion. This rise was driven by higher sales volume from the F-35 program.
The segment incurred an operating loss of $98 million against operating profit worth $751 million in the year-ago quarter. The operating loss margin was 1.3% against the prior-year quarter’s operating profit margin of 10.3%.
Missiles and Fire Control: Quarterly sales improved a solid 10.7% year over year to $3.43 billion. This was on account of higher sales from tactical and strike missile programs.
The segment’s operating profit increased 6.4% year over year to $479 million. The operating margin, however, contracted 50 basis points (bps) to 14%.
Space: The top line improved 3.5% year over year to $3.31 billion, driven by higher sales from commercial civil space programs, primarily the Orion program, as well as higher sales volume for strategic and missile defense programs.
The segment’s operating profit increased 4.6% to $362 million. The operating margin also expanded 10 bps to 10.9%.
Rotary and Mission Systems: Quarterly revenues declined 12.2% to $4 billion on a year-over-year basis, due to lower sales from Sikorsky helicopter programs, reduced production volume for Seahawk programs as well as lower volume for integrated warfare systems and sensors (IWSS) programs.
The segment incurred an operating loss of $172 million against operating profit worth $495 million in the second quarter of 2024. The operating loss margin was 4.3% against an operating profit margin of 10.9% in the year-ago quarter.
Lockheed’s cash and cash equivalents totaled $1.29 billion as of June 29, 2025, compared with $2.48 billion at the end of 2024.
Cash from operating activities amounted to $1.61 billion as of June 29, 2025, compared with $3.51 billion a year ago.
Long-term debt as of June 29, 2025, totaled $18.52 billion, down from $19.63 billion as of Dec. 31, 2024.
The company partially updated its 2025 guidance.
Lockheed still expects to generate sales in the range of $73.75-$74.75 billion in 2025. The Zacks Consensus Estimate is pegged at $74.32 billion, which lies above the midpoint of the company’s sales guidance.
However, LMT has lowered its adjusted earnings per share (EPS) guidance. The company now expects to generate adjusted EPS in the range of $21.70-$22.00 compared to the earlier guidance of $27.00-$27.30. The consensus estimate is currently pegged at $27.21 per share, which lies much above the company’s newly guided range.
Lockheed still expects to generate cash from operations in the range of $8.50-$8.70 billion. It also continues to expect capital expenditure of approximately $1.90 billion.
Lockheed still expects to generate a free cash flow in the range of $6.60-$6.80 billion.
Since the earnings release, investors have witnessed a downward trend in estimates review.
Currently, Lockheed has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Lockheed has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Lockheed is part of the Zacks Aerospace - Defense industry. Over the past month, GE Aerospace (GE), a stock from the same industry, has gained 1.2%. The company reported its results for the quarter ended June 2025 more than a month ago.
GE reported revenues of $10.15 billion in the last reported quarter, representing a year-over-year change of +23.4%. EPS of $1.66 for the same period compares with $1.20 a year ago.
GE is expected to post earnings of $1.45 per share for the current quarter, representing a year-over-year change of +26.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -1%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for GE. Also, the stock has a VGM Score of F.
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This article originally published on Zacks Investment Research (zacks.com).
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