Lockheed Martin Investors Not Impressed With Earnings Beat

Lockheed Martin Corp. (NYSE: LMT) released its fourth-quarter earnings report before the markets opened on Tuesday. The company had $3.01 in earnings per share (EPS) on $12.9 billion in revenue. Consensus estimates from Thomson Reuters had called for $2.94 in EPS on revenue of $12.36 billion. In the same period of the previous year, it posted EPS of $3.01 and $12.53 billion in revenue.

During this quarter, Lockheed Martin completed its acquisition of Sikorsky for $9.0 billion, net of cash acquired. Sikorsky is a global company primarily engaged in the design, manufacture and support of military and commercial helicopters.

In terms of the 2016 full year guidance, the company expects EPS to be in the range of $11.45 to $11.75 and revenues to fall between $ 49.5 billion and $51.0 billion. The consensus estimates call for $12.23 in EPS on $49.52 billion in revenue.

Lockheed Martin repurchased 3.2 million shares for $707 million and paid cash dividends of $505 million during the fourth quarter.

For the quarter, the business segments reported the following:

• Aeronautics had net sales of $4.38 billion, with an operating profit of $448 million.
• Information Systems & Global Solutions had net sales of $1.30 billion, with an operating profit of $131.
• Missiles and Fire Control had net sales of $1.97 billion, with an operating profit of $387 million.
• Mission Systems and Training had net sales of $2.79 million, with an operating profit of $157 million.
• Space Systems had net sales of $2.38 billion, with an operating profit of $288 million.

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Marillyn Hewson, chairman, president and CEO of Lockheed Martin, commented on earnings:

The corporation completed a year of exceptional operational accomplishments for customers and financial returns to stockholders. The successful closure of the Sikorsky acquisition and completion of the strategic review of our IS&GS businesses, coupled with our record backlog, position the corporation for future growth and value creation for our customers and our stockholders.

On the books, the company has cash and cash equivalents that totaled $1.09 billion at the end of the quarter, compared to $1.45 billion in the same period from the previous year.

Shares of Lockheed Martin were down more than 3% at $203.93 Tuesday morning, with a consensus analyst price target of $232.13 and a 52-week trading range of $181.91 to $227.91.