Lockheed Posts Mixed Q3 Results; Shares Sink 12%

American aerospace, arms, defense, information security and technology corporation Lockheed Martin Corporation (LMT) has reported mixed results for the third quarter ended September 26, 2021. Following the news, shares of the company plummeted 11.8% on Tuesday. The stock, however, pared its losses slightly to close at $332.75 in the extended trading session.

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Quarterly net sales declined 2.8% year-over-year and stood at $16 billion, missing the Street’s estimate of $17.12 billion. Missiles and Fire Control and Space segments slipped 6.4% and 5.2%, respectively. Notably, all the major revenue segments of the company witnessed a year-over-year decline in net sales.

The company reported quarterly earnings per share (EPS) of $2.21, down 65% from the prior year. The figure, however, surpassed the consensus estimate of $1.97 per share.

Lockheed Martin also increased its quarterly dividend by 7.7% to $2.80 per share in the third quarter.

The company expects net sales to the tune of $67 billion in 2021 against the consensus estimate of $68.34 billion. It expects to post EPS of $27.17 against the consensus estimate of $22.19.

The CEO of Lockheed Martin, James Taiclet, said, “During the third quarter, the men and women of Lockheed Martin continued to deliver essential products and capabilities for domestic and allied national defense, and for pioneering civil space endeavors. Over the short-, mid- and long-term, we will strive to maximize cash flow per share dynamically, based on revenue growth opportunities, inorganic investments, and share repurchases to take full advantage of our significant cash flow generation and strong balance sheet.” (See Lockheed Martin stock chart on TipRanks)

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Vertical Research analyst Robert Stallard reiterated a Buy rating on the stock. The analyst, however, lowered the price target to $385 from $462, which implies upside potential of 16% from current levels.

The Wall Street community is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 4 Buys and 5 Holds. The average Lockheed Martin price target of $408.22 implies that the stock has upside potential of 23% from current levels.

Lockheed Martin scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.