Will Unfavorable Charges & Taxes Hurt Lockheed's Q3 Earnings?

Lockheed Martin Corporation LMT is scheduled to release third-quarter 2025 results on Oct. 21, before market open.

The company delivered a four-quarter average earnings surprise of 12.27%. An upbeat sales performance from each of LMT’s four business segments is likely to have had a favorable impact on its third-quarter bottom-line performance, amid impacts from charges related to classified programs. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Aeronautics to Post Solid Sales

Higher sales volume from increased production contracts for the F-35 jet program is likely to have bolstered this segment’s top line.

The Zacks Consensus Estimate for the Aeronautics unit’s third-quarter revenues is pegged at $6,977 million, indicating a 7.6% rise from the prior-year period’s figure.

Lockheed Martin Corporation Price and EPS Surprise

Lockheed Martin Corporation price-eps-surprise | Lockheed Martin Corporation Quote

Missiles and Fire Control Unit to Remain Solid

A higher sales volume, resulting from the production ramp-up of tactical and strike missile programs, is likely to have benefited LMT’s Missiles and Fire Control segment’s (MFC) quarterly sales performance.

The Zacks Consensus Estimate for MFC’s revenues is pegged at $3,544 million, indicating an increase of 11.6% from the year-ago quarter’s number.

Rotary and Mission Systems Likely to Grow

The production ramp-up of the CH-53K helicopter program within the Sikorsky unit is likely to have bolstered the Rotary and Mission Systems (RMS) segment’s sales.

The Zacks Consensus Estimate for the RMS unit’s third-quarter revenues is currently pegged at $4,737.2 million, indicating 8.5% growth from the top line recorded a year ago.

Space Unit to Reflect Robust Performance

Higher sales volume from commercial civil space programs, particularly the Orion program, along with strategic and missile defense programs, particularly the Next Generation Interceptor (NGI), is likely to have bolstered the Space segment’s top line.

The Zacks Consensus Estimate for the segment’s revenues is pinned at $3,235 million, indicating 5.2% growth from the prior-year quarter’s number.

Backlog Projections

Our model estimates LMT’s third-quarter backlog to increase 6% year over year to $175.70 billion.

Q3 Estimates

With all four of LMT’s segments likely to report a year-over-year improvement in sales, one can be optimistic about its top-line results.

The Zacks Consensus Estimate for sales is pegged at $18.56 billion, indicating an improvement of 8.5% from the prior-year figure.

Such strong sales growth expectation is projected to have benefited LMT’s third-quarter earnings. However, charges related to a handful of Lockheed’s classified programs, as well as lingering losses arising from its two helicopter programs- Canadian Maritime Helicopter Program (CMHP) and Turkish Utility Helicopter Program (TUHP), along with charges related to uncertain tax positions, are expected to have hurt its quarterly bottom-line performance.

The Zacks Consensus Estimate for LMT’s third-quarter earnings is pegged at $6.32 per share, indicating a decline of 7.6% from the prior-year figure.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for LMT this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as you will see below.

Earnings ESP: LMT has an Earnings ESP of -1.10%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: LMT currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Below, we have mentioned players from the same industry that have the right combination of elements to beat on earnings in the upcoming releases.

GE Aerospace GE is set to report third-quarter 2025 earnings on Oct. 21, 2025, before market open. It has an Earnings ESP of +2.01% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for GE’s earnings is pegged at $1.46 per share, indicating year-over-year growth of 27%. The consensus estimate for its sales is pegged at $10.34 billion, indicating year-over-year growth of 15.6%.

RTX Corporation RTX is set to report its third-quarter 2025 results on Oct. 21, before market open. It has an Earnings ESP of +1.53% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for RTX’s earnings is pegged at $1.42 per share. The consensus estimate for its sales is pegged at $21.48 billion, indicating year-over-year growth of 6.9%.

Embraer ERJ is expected to report its third-quarter results soon. It has an Earnings ESP of +5.00% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for ERJ’s earnings is pegged at 67 cents per share. The consensus estimate for its sales is pegged at $2.07 billion, indicating year-over-year growth of 22.2%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research