Lockheed Martin Leads Defense Earnings As F-35 Deliveries Resume; RTX To Supply $24 Billion Order

Lockheed Martin headlines earnings for defense manufacturers this week with its Q2 results early Tuesday. General Dynamics (GD) reports Wednesday morning, followed by RTX and Northrop Grumman (NOC) early Thursday. L3Harris (LHX) is on tap early Friday.





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Lockheed Martin

FactSet expects Lockheed Martin (LMT) to report a second quarter of slim earnings declines, with a 4% decrease to $6.46 per share. Analysts predict revenue rises somewhat greater than 2% to $17.05 billion.

Meanwhile, Lockheed F-35 jet deliveries to the U.S. have resumed  following a monthslong halt attributable to software delays, Reuters reported on Saturday. Lockheed and its suppliers have been upgrading the hardware and software for the F-35s to enhance displays and processing power, as a part of the Technology Refresh 3 (TR-3) program. Although the updated hardware has been installed, the software is lagging, Secretary of the Air Force Frank Kendall told Reuters. Although the jets wouldn’t have the required functionality, they’re far enough along within the upgrades for the military to just accept delivery, Kendall said.

Senior officials confirmed the Pentagon will proceed to withhold some final payments for every jet until the enhancements are ready. Specific amounts weren’t disclosed.

To date, about $7 million of the ultimate $100 million payment for every fighter has been withheld.

Elsewhere, Lockheed Martin believes it could potentially attract orders for 300 F-16 jets, with prospective customers for new-build aircraft from the Philippines, Thailand and Turkey, FlightGlobal reported Saturday. Turkey has expressed interest in purchasing 40 new-build F-16 jets and upgrading 79 of its in-service F-16s. Estimates from the U.S. Defense Security Cooperation Agency forecast the deal might be value around $23 billion.

LMT stock is just above a still-valid 473.54 flat base buy point first cleared in early June. Investors could use recent highs above 475 as an alternate entry.

Lockheed Martin shares rose 4.5% in 2024.

General Dynamics

Analysts forecast General Dynamics will report a 21.5% increase in earnings to $3.28 per share, with revenue up 13% to $11.46 billion. Each would mark three straight quarters of accelerating growth.

General Dynamics stock is trading slightly below its 50-day line. Investors could use resistance above 302 as a possible buy point.

GD stock advanced 11% to date this yr.

RTX

RTX (RTX) earnings are expected to tick up 1 cent to $1.30 per share adjusted while revenue increases 5.3% to $19.29 billion.

Elsewhere, RTX on Monday announced it reached a memorandum of understanding to provide engines for the biggest aircraft order in Philippine aviation history. Airline Cebu Pacific agreed to buy as much as 152 A321neo aircraft from Airbus (EADSY) for an estimated $24 billion. RTX’s Pratt & Whitney business will supply GTF engines to power the aircraft.

The agreement covers firm orders for as much as 102 A321neo single-aisle aircraft, in addition to purchase rights for 50 additional jets within the A320neo family.

RTX stock is trading below a 108.65 buy point for a six-week flat base.

Shares ticked almost 1% higher Monday following the Cebu Pacific news.

Still, RTX is trading below its 50-day moving average. A powerful move above the 50-day line would break a trendline and clear a short-term high of 105.46.

RTX stock jumped 23% in 2024.

Northrop Grumman

FactSet estimates an 11% Northrop Grumman earnings increase to $5.93 per share. Analysts predict revenue grows 4.6% to $10.02 billion.

BTIG initiated coverage of Northrop Grumman in late June, saying it expects the corporate to be one in all the fastest-growing defense contractors through the rest of the last decade. The firm cited Northrop’s exposure to high-growth end markets, similar to space, in addition to its involvement with multiple programs critical to national security as key drivers. Northrop also has strong free money flow, which it largely returns to shareholders through buybacks and dividends, making it probably the most attractive long-term defense name, BTIG said.

BTIG has a buy rating and a 565 price goal on Northrop Grumman stock.

NOC stock is trading in the underside half of a flat base with a 490.60 buy point. Nonetheless, Northrop is trading below its 50-day moving average and 200-day lines.

NOC stock retreated greater than 6% to date this yr.

L3Harris

L3Harris earnings are seen rising 7% to $3.18 per share. Experts predict revenue jumps 13% to $5.3 billion, which might mark its first decline in sales growth after six quarters of accelerating gains.

LHX stock is prolonged above a buy zone for a flat base.

Shares have advanced 12% in 2024.

You may follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison

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