Why Lockheed Martin (LMT) Shares Are Getting Obliterated Today.
Shares of security and Aerospace company Lockheed Martin (NYSE:LMT) fell 6.6% in the morning session after the company reported disappointing second-quarter results and sharply lowered its full-year profit forecast.
The aerospace and defense giant announced second-quarter earnings of $1.46 per share, a significant miss from analyst expectations, driven by $1.6 billion in pre-tax losses on several programs. These included a $950 million loss on a classified aeronautics program and additional losses on helicopter programs for Canada and Turkey. Consequently, Lockheed slashed its full-year 2025 earnings per share (EPS) guidance to a range of $21.70 to $22.00, a steep reduction from its prior forecast of $27.00 to $27.30. While the company maintained its full-year sales forecast, the substantial charges and reduced profit outlook rattled investors. The company's cash flow also weakened considerably, with free cash flow turning negative in the quarter, a stark contrast to the positive inflow a year ago.
Lockheed Martin's shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today's move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 8.9% on the news that the company reported underwhelming fourth quarter results, with revenue and earnings both falling below Wall Street's expectations. Its full-year EPS guidance also missed significantly. Notably, this quarter's EPS fell short of Wall Street's estimates because the company recorded a $1.3 billion loss in its Missiles and Fire Control (MFC) business segment. Overall, these results could have been better.
IMHO, space stocks are really difficult investments. They are not particularly a sector that's deemed necessary and iron-clad. So investors got to be able to stomach volatility, especially after ER. Perhaps I'd rather be more invested in $Rocket Lab USA, Inc.(RKLB)$
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