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Category: Stock Market and Lockheed Martin
Date: 23 October 2019 Stock Price: $371.56 We take a look at the 3rd quarter earnings report of their 2019 fiscal year of Lockheed Martin, a global security and aerospace company that employs almost 105 000 people worldwide.
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About Lockheed Martin
Headquartered in Bethesda, Maryland, Lockheed Martin Corporation is a global security and aerospace company that employs approximately 105,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services.
Lockheed weapon systems
Lockheed Martin has a long history of successfully providing its customers with missile and missile systems that are affordable, proven, and in production. Our reputation is backed by a record of exceptional contractual performance and successful partnerships, in both the U.S. and international defense communities.
Lockheed Martin is supporting the warfighter by providing a wide variety of highly effective and reliable weapons systems to ensure that the right weapon is available for each situation that they may face. These weapon systems include precision strike weapons with long standoff ranges to keep pilots and aircraft out of harm's way. Lockheed Martin systems also include smart submunitions to give the warfighter maximum flexibility as well as fire support mobile artillery and guided munitions to dominate the battlefield.
Other Lockheed Martin systems include air-to-air missiles to give pilots air supremacy; helicopter launched anti-armor missiles to destroy enemy tanks and other armored vehicles; man-portable short-range anti-armor and assault weapons; kinetic energy hyper-velocity missiles that can defeat all current and future armored threats, hit-to-kill air defense systems that protect the troops from ballistic missiles, cruise missiles, enemy aircraft and weapons of mass destruction. Lockheed Martin-developed strategic missile systems include intercontinental-range ballistic missiles and reentry systems that serve as strategic deterrents.
Lockheed weapon systems
Lockheed Martin has a long history of successfully providing its customers with missile and missile systems that are affordable, proven, and in production. Our reputation is backed by a record of exceptional contractual performance and successful partnerships, in both the U.S. and international defense communities.
Lockheed Martin is supporting the warfighter by providing a wide variety of highly effective and reliable weapons systems to ensure that the right weapon is available for each situation that they may face. These weapon systems include precision strike weapons with long standoff ranges to keep pilots and aircraft out of harm's way. Lockheed Martin systems also include smart submunitions to give the warfighter maximum flexibility as well as fire support mobile artillery and guided munitions to dominate the battlefield.
Other Lockheed Martin systems include air-to-air missiles to give pilots air supremacy; helicopter launched anti-armor missiles to destroy enemy tanks and other armored vehicles; man-portable short-range anti-armor and assault weapons; kinetic energy hyper-velocity missiles that can defeat all current and future armored threats, hit-to-kill air defense systems that protect the troops from ballistic missiles, cruise missiles, enemy aircraft and weapons of mass destruction. Lockheed Martin-developed strategic missile systems include intercontinental-range ballistic missiles and reentry systems that serve as strategic deterrents.
Overview of Lockheed Martin's 3rd quarter 2019 earnings report
Data below refers to quarterly data unless specified otherwise:
- Total revenues: $15.171 billion (up from $14.318 billion for the same period of the previous year)
- Total revenues increased by 5.96% over the last 12 months
- Cost of sales: $13.108 billion (up from $12.397 billion for the same period of the previous year)
- Cost of sales increased by 5.7% over the last 12 months
- Net income: $1.608 billion (up from $1.473 billion for the same period of the previous year)
- Diluted earnings per share: $5.66 (up from $5.14 for the same period of the previous year)
- PE ratio of Lockheed Martin: 16.48
- Diluted weighted-average shares outstanding: 283.90 million (down from 286.7 million for the same period of the previous year)
- Cash and cash equivalents: $2.539 billion
- Cash and cash equivalents per share: $8.94
- Cash and cash equivalents makes up 2.41% of Lockheed Martin's market capital
- Cash and cash equivalents makes up 5.15% of Lockheed Martin's total assets
- Stockholders equity of Lockheed Martin: $3.937 billion
- Stockholders equity per share: $13.87
- So Lockheed Martin is trading at 26.7 times its stockholders equity which is well outside the expected range of between 2 and 4 that most firms then to trade at.
- Cash generated from operations: $214.688 million
- Cash generated from operations per share: $2.52
Lockheed Martin's management commentary on their 3rd quarter results
BETHESDA, Md., Oct. 22, 2019 – Lockheed Martin Corporation [NYSE: LMT] today reported third quarter 2019 net sales of $15.2 billion, compared to $14.3 billion in the third quarter of 2018. Net earnings in the third quarter of 2019 were $1.6 billion, or $5.66 per share, compared to $1.5 billion, or $5.14 per share, in the third quarter of 2018. Cash from operations in the third quarter of 2019 was $2.5 billion, compared to cash from operations of $361 million after pension contributions of $1.5 billion in the third quarter of 2018. “The corporation achieved another quarter of strong growth and outstanding operational performance,” said Lockheed Martin Chairman, President and CEO Marillyn Hewson. “As we look ahead to 2020, we remain focused on providing innovative solutions for our customers, investing for long-term growth, and generating value for our shareholders.”
The corporation expects its 2020 net sales to increase to approximately $62.0 billion. Total business segment operating margin in 2020 is expected to be in the 10.5 percent to 10.8 percent range and cash from operations is expected to be greater than or equal to $7.2 billion, net of $500 million of pension contributions. The preliminary outlook for 2020 assumes there is no impact from U.S. Government actions related to Turkey and the U.S. Government continues to support and fund the corporation's key programs. Changes in circumstances may require the corporation to revise its assumptions, which could materially change the corporation's current estimate of 2020 net sales, operating margin and cash flows.
Lockheed Martin (NYSE: LMT) stock price history
The image below, obtained from Google, shows the stock price history of Lockheed Martin over the last 5 years. And it's been a good time for Lockheed Martin stockholders. 5 years ago the stock was trading at around $181.30 a stock and its currently trading at $371.56 a stock. That's a return of 104.9% provided to Lockheed Martin stockholders over the last 5 years.
The stock of Lockheed Martin is trading at a lot closer to its 52 week high of $373.68 than it is to its 52 week low of $241.18 which to us is an indication that the momentum and sentiment of Lockheed Martin stock is very positive at this point in time.
The stock of Lockheed Martin is trading at a lot closer to its 52 week high of $373.68 than it is to its 52 week low of $241.18 which to us is an indication that the momentum and sentiment of Lockheed Martin stock is very positive at this point in time.
Recent coverage of Lockheed Martin
The extract below discusses the latest news regarding Lockheed Martin as obtained from TheStreet.com
VALLEY FORGE, Pa., Oct. 23, 2019 /PRNewswire/ -- The US Air Force has awarded Lockheed Martin (NYSE: LMT) a $108 million contract for the Mark21A Reentry Vehicle (Mk21A) Technology Maturation and Risk Reduction (TMRR) contract.
The potential value of the contract is estimated at $138 million: $108 million awarded in the three-year contract and $30 million as a potential one-year contract. "It is essential that Lockheed Martin continue our long-standing ICBM partnership with the Air Force to provide them with advanced solutions. We will continue to demonstrate, through this TMRR, cutting-edge engineering to defeat rogue nation threats," said John Snyder, vice president of Advanced Strategic Programs for Lockheed Martin. Lockheed Martin will work closely with the Air Force and the National Nuclear Security Administration to provide a technically low risk and affordable solution to modify existing Mk21 reentry vehicles with the capability to deliver the W87-1 Warhead for the Ground Based Strategic Deterrent Weapon System. The Mk21A TMRR contract is a key element of Lockheed Martin's strategy to remain the Air Force's trusted partner for ICBM Reentry Systems and modernization of the deterrent triad
VALLEY FORGE, Pa., Oct. 23, 2019 /PRNewswire/ -- The US Air Force has awarded Lockheed Martin (NYSE: LMT) a $108 million contract for the Mark21A Reentry Vehicle (Mk21A) Technology Maturation and Risk Reduction (TMRR) contract.
The potential value of the contract is estimated at $138 million: $108 million awarded in the three-year contract and $30 million as a potential one-year contract. "It is essential that Lockheed Martin continue our long-standing ICBM partnership with the Air Force to provide them with advanced solutions. We will continue to demonstrate, through this TMRR, cutting-edge engineering to defeat rogue nation threats," said John Snyder, vice president of Advanced Strategic Programs for Lockheed Martin. Lockheed Martin will work closely with the Air Force and the National Nuclear Security Administration to provide a technically low risk and affordable solution to modify existing Mk21 reentry vehicles with the capability to deliver the W87-1 Warhead for the Ground Based Strategic Deterrent Weapon System. The Mk21A TMRR contract is a key element of Lockheed Martin's strategy to remain the Air Force's trusted partner for ICBM Reentry Systems and modernization of the deterrent triad
Lockheed Martin (NYSE: LMT) latest stock valuation
So what is Lockheed Martin stock worth based on the release of their latest earnings report and their outlook provided? Based on Lockheed Martin latest earnings report our valuation models provide a target (full value) price for Lockheed Martin stock at $344.90 a stock. We therefore believe that the stock of Lockheed Martin is overvalued.
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $344.90 Therefore we believe a good entry point into Lockheed Martin stock is at $310.40 or below. We expect the stock of Lockheed Martin to pull back from current levels in coming weeks and months to levels closer to our target (full value) price.
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $344.90 Therefore we believe a good entry point into Lockheed Martin stock is at $310.40 or below. We expect the stock of Lockheed Martin to pull back from current levels in coming weeks and months to levels closer to our target (full value) price.
Next earnings release date for Lockheed Martin
It is expected that Lockheed Martin (NYSE: LMT) 4th quarter 2019 earnings report will be released towards the end of January 2020