Lockheed Martin reported fourth-quarter earnings that were just shy of Wall Street's expectations.
Expectations vs. results
- Earnings: $4.39 a share vs. $4.40 a share expected in an analyst survey by Refinitiv.
- Revenue: $14.4 billion vs. $13.75 billion expected in the survey.
Lockheed Martin said it expects 2019 earnings a share within a range of $19.15 to $19.45 a share, below Wall Street's expectation of $19.57 a share in a FactSet survey.
Lockheed added language regarding "the impact of government shutdowns" to its list of factors that may affect any forward-looking statements. The partial U.S. government shutdown stemming from the impasse over President Donald Trump's demand for $5.7 billion to construct a border wall ended Friday. While the Pentagon was open for business during the 35-day shutdown, it hit agencies like NASA and the Department of Homeland Security.
"The previous closure of these agencies did not have significant impact on this year's financial metrics, as the vast majority of our business is currently funded through the DoD's FY19 appropriations bill," Lockheed Martin CEO Marillyn Hewson said on a conference call Monday.
"Should a budget impasse reoccur after the three week continuing resolution expires, it is possible we could see some delays in 2019 awards and orders," Hewson added.
The company's shares fell as much as 2.4 percent in premarket trading but later rebounded, ending the day up 1.5 percent at $292.05 a share.
Lockheed remains the world's top weapons manufacturer, selling combat ships, hypersonic missiles, fighter jets and more. In 2017, the arms giant brought in $44.9 billion in sales, an 8.3 percent increase from 2016, according to a report by the Stockholm International Peace Research Institute.
This year, Lockheed Martin snatched both of the Pentagon's new hypersonic weapon contracts and continued delivery of its F-35 fighter jet. The F-35, Lockheed Martin's largest program, was financed in part by NATO ally Turkey. But Lockheed warned current legislation prohibits the sale of 100 F-35 jets to Turkey due to Ankara's recent purchase of Russia's S-400 missile system. In short, these two big ticket weapons systems can be used against each other, although Turkey hopes to add both to its budding arsenal.
The operating profit of Lockheed's space business rose 4 percent in the fourth quarter of 2018 compared with the same period last year, as an increase in commercial satellite profits offset a decline in government satellite profits.
The defense giant saw the signing of a letter of offer and acceptance between the United States and Saudi Arabia for the THAAD missile system. The government-to-government agreement helped pave the way for the $15 billion sale, which includes 44 THAAD launchers and missiles.
THAAD, or terminal high altitude area defense, is regarded as America's crown jewel in missile defense systems.
Boeing, Northrop Grumman, Raytheon and General Dynamics are also due to report quarterly earnings this week.