Why Lockheed Martin’s share price fell after the results

LMT’s stock price analysis

The week before Lockheed Martin (LMT) announced its results, its stock gained ~1.5%. However, these gains were wiped out after the announcement of the company’s 3Q15 results. One of the reasons was that its revenue missed for the quarter. However, the main reason for the decline was the company’s poor guidelines for fiscal year 2015.

2015 guidance

The company expects a lower single digit growth for its net sales in 2015 compared to 2014. It also expects the operating margin to decline to 11.5%–12% from the current 12.5% in 2014. This is mainly because the U.S. government’s spending cuts haven’t bottomed out this year like the company expected.

However, LMT expects the government will continue to fund its key programs—mainly the company’s largest program, the F-35 II joint striker program.

LMT’s competitors include Rockwell Collins (COL), The Boeing Company (BA), and Excelis Inc. (XLS). Some of these companies are part of the Industrial Select Sector SPDR (XLI).