What Happened?

Shares of security and Aerospace company Lockheed Martin (NYSE:LMT) fell 8.9% in the morning session after the company reported underwhelming fourth quarter results, with revenue and earnings both falling below Wall Street's expectations. Its full-year EPS guidance also missed significantly. Notably, this quarter's EPS fell short of Wall Street's estimates because the company recorded a $1.3 billion loss in its Missiles and Fire Control (MFC) business segment. Overall, these results could have been better.

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What The Market Is Telling Us

Lockheed Martin’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 3 months ago when the stock dropped 5.5% on the news that the company reported third-quarter earnings results, with revenue falling below Wall Street's expectations. Notably, the company was unable to recognize revenue and profit on approximately $400 million of costs incurred on the Lots 18-19 production contract in the quarter. 

On the other hand, Lockheed Martin blew past analysts' EBITDA expectations, and its full-year revenue guidance came in higher than Wall Street's estimates. Overall, this was a mixed but weaker quarter.

Lockheed Martin is down 4.4% since the beginning of the year, and at $461.12 per share, it is trading 25% below its 52-week high of $614.61 from October 2024. Investors who bought $1,000 worth of Lockheed Martin’s shares 5 years ago would now be looking at an investment worth $1,055.

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