Lockheed Martin Exceeds Q1 Performance Expectations, Reaffirms FY23 Outlook

Lockheed Martin Corp LMT reported a first-quarter FY23 net sales growth of 1.1% year-over-year to $15.13 billion, above the consensus of $15.04 billion.
Adjusted EPS of $6.43 topped the consensus of $6.06.
The gross margin expanded 77 bps to 13.5%. The operating profit increased by 5.4% Y/Y to $2.04 billion, and the margin expanded by 55 bps to 13.5%.
Aeronautics sales of $6.27 billion (-2% Y/Y) and operating margin 10.8%, up by 20 bps.
Missiles and Fire Control sales of $2.39 billion (-3% Y/Y); operating margin 15.8%, up by 10 bps.
Rotary and Mission Systems sales of $3.51 billion (-1% Y/Y); operating margin 10%, down 140 bps.
Space net sales of $2.96 billion (+16% Y/Y); operating margin 9.5%, down by 20 bps.
LMT returned $1.3 billion of cash to shareholders through dividends and share repurchases.
Lockheed Martin generated cash from operating activities of $1.56 billion, compared to $1.41 billion a year ago.
Free cash flow was $1.27 billion, compared to $1.14 billion in 1Q22.
At the end of the quarter, the company's total backlog was $145.1 billion, a decline of 3.3% from the backlog at Dec. 31, 2022.
FY23 Outlook, reiterated: Lockheed Martin expects net sales of ~$65 billion -$66 billion versus the consensus of $65.71 billion. EPS of ~$26.60-$26.90 versus the consensus of $26.78.
The company sees Business segment operating profit of $7.255 billion - $7.355 billion, cash from operations of ~$8.15 billion, and free cash flow of ~$6.2 billion.
Price Action: LMT shares are trading higher by 2.12% at $500.00 in the premarket on Tuesday.

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