Lockheed Martin (NYSE: LMT) handily topped earnings estimates in the first quarter and the company is poised to do it again when it reports second-quarter earnings on Tuesday.
In fact, the market seems to already be pricing the earnings beat in, as Lockheed Martin stock is up more than 3% in the past week.
What the market’s pricing in is an estimated 2.2% jump in revenue, which is expected to come in at $17.06 billion.
That would build on the momentum Lockheed Martin accrued in the first quarter, when it posted a 14% increase in revenue. And while net income fell 8.5% in Q1, the Q2 forecast anticipates just a 4% decline.
Now, I could easily sit here and make the case for Lockheed Martin stock based on the current political climate.
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The U.S. defense budget is rapidly approaching the $1 trillion market with no signs of slowing down…
Global defense spending is on the same trajectory, provoked by marked aggression from Russia, China, North Korea, and Iran…
Donald Trump has repeatedly, explicitly pledged to abandon America’s allies if he’s elected, which would force them to expand their defense budgets even further…
And as the world’s largest defense contractor, Lockheed Martin is perfectly positioned to profit from this chaos and defense budget pumping.
But in truth, the most promising aspect of Lockheed Martin’s business is its Space segment.
Lockheed Martin’s space unit led the company in growth last year with a 9% increase in sales.
That trend continued in the first quarter of 2024, when the Space segment posted $3.3 billion in sales and a 16% increase in profit ($45 million).
The growth comes from a slew of major government projects and missile defense systems, in particular.
To that point, Lockheed won a massive $17 billion contract to develop the next generation of interceptors for America’s homeland defense. These are what we’ll rely on to counter nuclear and hypersonic threats from Russia and China.
The company has also scored huge deals for tracking satellites to identify and respond to potential and incoming threats.
It’s deals like these that pushed the Space segment’s revenue to a record $33 billion in the first quarter. And the second quarter certainly expounded on that.
Indeed, just last month, Lockheed Martin landed a $2.3 billion deal to design and build spacecraft for a satellite program run by NASA and the National Oceanic and Atmospheric Administration (NOAA).
Also last month, the Air Force awarded the company a $1 billion contract extension for missile-warning satellites in a separate deal. Those satellites will detect and track ballistic missile launches with infrared sensors that can identify the heat signatures of incoming missiles and securely notify ground stations
These are the kinds of deals that are really driving Lockheed Martin’s earnings beats. But if you really want to profit from the burgeoning space business, then you should check out my latest report here.
It details a company that doesn’t just manufacture satellites — it launches them, too. And at a fraction of the cost of traditional providers.
It’s a tremendous growth opportunity that no investor should miss out on. So be sure to check it out.
Fight on, Jason Simpkins Simpkins is the founder and editor of Secret Stock Files, an investment service that focuses on companies with assets — tangible resources and products that can hold and appreciate in value. He covers mining companies, energy companies, defense contractors, dividend payers, commodities, staples, legacies and more… In 2023 he joined The Wealth Advisory team as a defense market analyst where he reviews and recommends new military and government opportunities that come across his radar, especially those that spin-off healthy, growing income streams. For more on Jason, check out his editor’s page. Be sure to visit our Angel Investment Research channel on YouTube and tune into Jason’s podcasts. Want to hear more from Jason? Sign up to receive emails directly from him ranging from market commentaries to opportunities that he has his eye on. 
