Summary
- Lockheed Martin’s net sales, net profits, and diluted earnings per share increased in Q1 2021.
- The balance sheet remains strong and slightly improved in Q1 2021 compared to Q1 2020.
- Management provided a positive and improved outlook for full-year 2021.
- LMT achieved a record high in shareholder remuneration through buybacks and dividends, considering Q1 results updates.
Lockheed Martin Corp. (LMT) 1Q 2021 results increased outlook for full year 2021 and suggest that the company is on track to deliver record high operating results in 2021. As included in our first article, Lockheed Martin achieved record high net sales, net profits and earnings per share in FY 2020.
Lockheed Martin had a brilliant start to 2021: achieving higher net sales, net profits and diluted earnings per share than in 1Q 2020. If LMT continues to deliver high operating results in the following quarters, the company can achieve record high net sales, profits and earnings per share in 2021. If this happens and LMT stock price remains at current levels (at around $390), LMT stock represents a safer value investing opportunity than it was in 2020.
Net sales, net profits and diluted earnings per shares increased roughly 4%, 7% and 8% respectively in 1Q 2021 versus 1Q 2020. This simple comparison can already provide valuable insights. Firstly, Lockheed Martin improved its profit margin with respect to 1Q 2020 (11.30% versus 10.97% as per author calculations using 1Q 2021 LMT earnings release). Secondly, LMT shareholders value increased in 1Q 2020 thanks to more aggressive buybacks. In fact, net profit margins were at 11.30% in 1Q 2021, which are the second highest profit margins ever, considering 1Q results in the period 2021-2010 (only beaten by 1Q 2019 profit margins at 11.89%). It is worthwhile to recall that 1Q 2019 earnings reported a stunning performance: 23% increase in net sales, 47% in net profits and 49% in earnings per share (as disclosed on 1Q 2019 LMT earnings release).
Additionally, 1Q 2021 results reported the record highest shares repurchase figure in a 10 years span considering all previous 1Q results, spending $1 billion in buybacks in 1Q 2021.
