Lockheed Martin Corporation
) is set to report second quarter 2013 results on Jul 23. Last
quarter it posted a 23.4% surprise. Let's see how things are
shaping up for this announcement.
BOEING CO (BA): Free Stock Analysis Report
EMBRAER AIR-ADR (ERJ): Free Stock Analysis
GENL DYNAMICS (GD): Free Stock Analysis
LOCKHEED MARTIN (LMT): Free Stock Analysis
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Growth Factors This Quarter
Lockheed Martin is the largest U.S. defense contractor with a
platform-centric focus that guarantees a steady inflow of
follow-on orders. We expect Lockheed Martin to register a stable
performance in the long run due to a leveraged presence in the
Army, Air Force, Navy and IT programs. Also, shareholder return
will continue to be shored up by the company's focus on debt
repayment, its ongoing share repurchase program and the
Lockheed has successfully clinched a number of defense contracts
in the first half of 2013, thanks to its diversified operations.
The company's persistent focus on technological innovation has
allowed Lockheed to attract lucrative government orders in the
past as well as present.
The most notable award received by the defense major in Jun 2013
is the $320 million U.S. Air Force contract for the supply of
enhanced communications reliability, survivability, and
Overseas contract flows have also been promising. Recently,
Lockheed secured a $308.3 million foreign military sales contract
for the continued delivery of tactical missiles and modification
kits to Kuwait defense forces.
However, like its peers, Lockheed Martin continues to face the
brunt of defense budget cuts which will limit its operating
Our proven model does not conclusively show that Lockheed Martin
is likely to beat the Zacks Consensus Estimate this quarter. This
is because a stock needs to have both a positive Expected
Surprise Prediction (ESP) (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this
to happen. Unfortunately, this is not the case here as elaborated
Negative Zacks ESP:
This is because the Most Accurate estimate is $2.16 while the
Zacks Consensus Estimate is higher at $2.21. This leads to an ESP
of -2.26% for Lockheed Martin.
Zacks Rank #3 (Hold):
Lockheed Martin's Zacks Rank #3 decreases the predictive power of
We caution investors against the stock going into the earnings
announcement, as a Zacks Earnings ESP of -2.26% combined with a
Zacks Rank # 3 lowers the possibility of an earnings surprise.
Other Stocks to Consider
Here are other companies to consider as our model shows they have
the right combination of elements to post an earnings beat this
The Boeing Company
), Earnings ESP of +1.27% and Zacks Rank #2 (Buy).
), Earnings ESP of +6.35% and Zacks Rank #3 (Hold).
General Dynamics Corp.
), Earnings ESP of +0.61% and Zacks Rank #3 (Hold).