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Lockheed Martin (LMT) Tops Q3 EPS by 83c, Updates FY Guidance, Comments on FY19

October 23, 2018 7:34 AM EDT

Lockheed Martin (NYSE: LMT) reported Q3 EPS of $5.14, $0.83 better than the analyst estimate of $4.31. Revenue for the quarter came in at $14.3 billion versus the consensus estimate of $13.05 billion.

GUIDANCE:

Lockheed Martin sees FY2018 EPS of $17.50, versus the consensus of $17.11. Lockheed Martin sees FY2018 revenue of $53 billion, versus the consensus of $52.64 billion.

2019 Financial Trends

The corporation expects its 2019 net sales to increase by approximately 5.0 percent to 6.0 percent as compared to the 2018 outlook. Total business segment operating margin in 2019 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 $7.0 billion. The preliminary outlook for 2019 assumes 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 its current estimate of 2019 net sales, operating margin and cash flows.

The corporation expects the net 2019 FAS/CAS pension benefit to be approximately $1.5 billion assuming a 4.125 percent discount rate (a 50 basis point increase from the end of 2017), a 1.00 percent return on plan assets in 2018, and a 7.00 percent expected long-term rate of return on plan assets in future years (a 50 basis point decrease from the end of 2017), among other assumptions. As a result of the $5.0 billion in contributions to its qualified defined benefit pension plans in 2018 the corporation does not expect to make contributions to its qualified defined benefit pension plans in 2019. A change of plus or minus 25 basis points to the assumed discount rate, with all other assumptions held constant, would result in an incremental increase or decrease of approximately $120 million to the estimated net 2019 FAS/CAS pension adjustment. A change of plus or minus 100 basis points to the return on plan assets in 2018 only, with all other assumptions held constant, would increase or decrease the net 2019 FAS/CAS pension adjustment by approximately $20 million. The corporation will finalize the postretirement benefit plan assumptions and determine the 2018 actual return on plan assets on Dec. 31, 2018. The final assumptions and actual investment return for 2018 may differ materially from those discussed above.

For earnings history and earnings-related data on Lockheed Martin (LMT) click here.



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