Lockheed Martin Reports Q2 Earnings; Stock Rises

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Shares of defense contractorLockheed Martin ( LMT ) gained altitude Tuesday after the company reported better-than-expected quarterly earnings and revenue and gave a generally upbeat view of what's going on inside the company.

The company reported earnings of $2.76 a share, a 5% increase from a year ago, vs. estimates of $2.66. Revenue came in at $11.31 billion, a 1% decline, yet above estimates of $11.14 billion.

That sent the stock up 4.89 to close at 167.87, landing it just a hair's breadth from an all-time high. Lockheed is a slow but steady grower, depending on the vicissitudes of defense budget politics.


CFO Bruce Tanner said on the conference call that investigators had not firmly established the root cause of a fire that grounded an F-35 jet fighter, "but we're getting close."

The F-35 was grounded on Pentagon orders after an engine fire in June at a Florida air base. The action meant the plane missed two highly publicized air shows in the U.K. He said Pentagon officials have reassured foreign buyers the problem is not related to the engine design. The plane is scheduled to go into combat service next July.

Growth has slowed down from heavy defense spending of the Bush administration, but it's grown earnings the past four years from 1% to 5% to 5% to 18%. Analysts are forecasting 10% growth this year and 6% the next. The five-year Earnings Stability Factor is 4 on a 0 to 99 scale, where low numbers correspond with stable earnings growth.

Revenue has grown for 11 straight years, but fell by 4% in 2013.

Lockheed has been growing dividends nicely. From a quarterly payout of 11 cents a share in 2000, it's now $1.33, which works out to an annual yield of 3.3%. The next quarterly payment is Sept. 26 to shareholders of record Sept. 2.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Personal Finance , Investing Ideas

Referenced Stocks: LMT

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