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Can Solid Order Flows Aid Lockheed Martin's (LMT) Q4 Earnings?

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Lockheed Martin CorporationLMT is expected to release fourth-quarter and full-year 2018 results on Jan 29, before the opening bell.

In the las t report ed quarter, the company delivered a positive earnings surprise of 18.98%. Also, it outperformed the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 13.92%.

Let's see how things are shaping up prior to this announcement.

Why a Likely Positive Surprise?

Our proven model shows that Lockheed Martin is likely to beat estimates in the fourth quarter because it has the right combination of the two key ingredients. A stock needs to have both - a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) - for this to happen. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Earnings ESP : Lockheed Martin has an Earnings ESP of +4.20% as the Most Accurate Estimate is pegged at $4.57, higher than the Zacks Consensus Estimate of $4.34.

Zacks Rank : Lockheed Martin carries a Zacks Rank #3.

We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Lockheed Martin Corporation Price and EPS Surprise

Lockheed Martin Corporation Price and EPS Surprise | Lockheed Martin Corporation Quote

Factors at Play

Being a prominent defense contractor, Lockheed Martin continues to win significant contracts from the U.S. Defense Department and its allies. This, in turn, is likely to provide a boost to the company's earnings in fourth-quarter 2018. Moreover, management at the company predicted higher segment operating profit to drive the soon-to-be-reported quarter's earnings. In line with this, the Zacks Consensus Estimate for fourth-quarter earnings is pegged at $4.36, mirroring a 1.4% improvement year over year.

On the revenue front, the Zacks Consensus Estimate does not reflect any improvement during the fourth quarter. The consensus mark of $13.8 billion reflects a year-over-year decline of 8.7%. This downside can be attributed to apprehensions that ample order growth might not have been realized into substantial revenue recognition.

Key Picks

In addition to Lockheed Martin, investors can consider the following players from the same industry that also have the right combination of elements to post an earnings beat this quarter.

L3 Technologies, Inc. LLL is expected to report fourth-quarter 2018 results on Jan 29. The company has an Earnings ESP of +1.19% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here .

Huntington Ingalls Industries, Inc. HII is expected to report fourth-quarter 2018 results on Feb 14. The company has an Earnings ESP of +11.85% and a Zacks Rank #3.

Recent Defense Releases

Teledyne Technologies TDY reported adjusted fourth-quarter 2018 earnings of $2.33 per share, which surpassed the Zacks Consensus Estimate of $2.19 by 6.4%. The bottom line also improved 27.3% from the year-ago quarter's figure of $1.83.

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Huntington Ingalls Industries, Inc. (HII): Free Stock Analysis Report

Lockheed Martin Corporation (LMT): Free Stock Analysis Report

Teledyne Technologies Incorporated (TDY): Free Stock Analysis Report

L3 Technologies Inc. (LLL): Free Stock Analysis Report

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


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

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