Lockheed Martin Shares Slip On Q2 Miss, Lowered FY22 Guidance - Lockheed Martin (NYSE:LMT)

Lockheed Martin Corp LMT reported a second-quarter FY22 net sales decline of 9.3% year-over-year to $15.45 billion, missing the consensus of $16.05 billion.
Adjusted EPS declined to $6.32 from $6.42 in 2Q21, below the consensus of $6.39.
The gross margin was flat at 12.7%. The operating profit decreased by 10.5% Y/Y to $1.96 billion, and the margin contracted 16 bps to 12.7%.
Aeronautics sales of $5.86 billion (-12% Y/Y) and operating margin 10.4%, up by 180 bps.
Missiles and Fire Control sales of $2.75 billion (-7% Y/Y); operating margin 15.2%, up by 160 bps.
Rotary and Mission Systems sales of $4.01 billion (-5% Y/Y); operating margin 10%, down 80 bps.
Space net sales of $2.83 billion (-11% Y/Y); operating margin 9.5%, down by 100 bps.
Also Read: US DoD, Lockheed Tout Handshake Deal For 375 F-35 Fighter Jets: Report
Lockheed Martin generated cash from operating activities year-to-date of $2.74 billion, compared to $3.02 billion a year ago. Free cash flow was $2.17 billion for the half-year period.
LMT returned $1.1 billion of cash to shareholders through share repurchases and dividends during the quarter.
At the end of the quarter, the company's total backlog was $134.64 billion, a slight decline of 0.53% from December 31, 2021.
"Although revenue in the period was affected by supply chain impacts and the timing of customer contract negotiations, our cost management initiatives resulted in margin expansion," commented Chairman, President, and CEO James Taiclet.
FY22 Outlook: Lockheed Martin expects net sales of ~$65.25 billion (prior $66 billion) versus the consensus of $65.98 billion. EPS of ~$21.55 (prior ~$26.70) versus the consensus of $26.85.
The company's results of operations, cash flows, and financial condition will be negatively impacted until it reaches a final agreement with the U.S. Government on the F-35 contract costs.
The company's forecast for Business segment operating profit of $7.18 billion, cash from operations of ~$7.9 billion, and free cash flow of ~$6 billion remain unchanged.
Price Action: LMT shares are trading lower by 3.03% at $375.55 during the premarket session on Tuesday.
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