Lockheed Martin Corp. (LMT) is expected to report Q4 earnings on Thursday, January 28 before the market open with a conference call scheduled for 3:00 pm ET.
GuidanceAnalysts are looking for EPS of $1.99 on revenue of $12.47B. The consensus range is $1.84-$2.09 for EPS, and $12.15B-$12.65B for revenue, according to First Call. On October 20, the company raised its FY09 EPS guidance to $7.40-$7.60 from prior $7.15-$7.35. It also expects its FY11 and FY12 revenue to grow roughly 5% due to the expansion of the F-35 Joint Strike Fighter program. It is clear that Lockheed executives believe the company will grow top and bottom line results over the next several years specifically because of this program. A recent report from Reuters claiming that the government plans to cut production of the plan by 122 planes through FY15 did little to discourage that positive sentiment. Concerns about cost overruns and delays have only added to investor anxiety. While short term results will not be affected by the F-35 program, it’s clear that the 2-5 year growth estimates of the company rest squarely with its success or failure.
Analyst ViewsOn January 6, Goldman Sachs downgraded the company to Sell from Neutral and lowered their price target to $64. On January 7, it was downgraded to Neutral from Buy at Broadpoint, with a $73 price target. In both instances, challenges to the F-35 program were cited. The stock has traded sideways in recent months in a very narrow range. An earnings surprise will likely be needed to break it out of this channel.
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