NEW YORK, NY / ACCESSWIRE / April 25, 2018 / Lockhead Martin and Boeing both closed in the red on Tuesday. Shares of Lockhead slipped after reporting first quarter results and revealing that there would be negative cash from operations in the second quarter. Boeing didn't have any news, but fell as traders waited eagerly for the company's quarterly report today.
RDI Initiates Coverage on:
Lockheed Martin Corporation
The Boeing Company
Lockheed Martin Corporation shares closed down 6.17% on Tuesday with nearly 3.8 million shares traded. The defense company saw its shares drop after reporting fiscal first quarter 2018 results. Earnings hit $4.02per share, a 49% increase YOY, and was a lot better than the $3.40 that analysts were waiting for. Sales at $11.6 billion was also ahead of analyst's expectations. So why the drop? The company only saw a growth in sales of 4%. The company's chief financial officer also told Wall Street analysts on a conference call that pension contributions could cause "negative cash from operations in the second quarter." According to Robert Stallard, an analyst with Vertical Research, "There could be some modest disappointment that the cash guidance has not been raised, but it is early in the year and cash is trickier to predict." It was also earlier in the month that the company confirmed that the Pentagon had temporarily halted deliveries of the F-35 jet over a contractual issue. CEO Marillyn Hewson said, "It's just a temporary suspension that they have on accepting some aircraft until we reach agreement on a contractual issue."
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The Boeing Company shares closed down 2.89% on about 7 million shares traded yesterday. It wasn't the best day of trading for the company yesterday as it geared up to release financial results this morning. Market strategist at Susquehanna, Stacey Gilbert, remarked on CNBC's "Trading Nation" yesterday, "As you have comments that don't seem to be as positive heading into these earnings, Boeing has started to increase the risk that investors are anticipating around earnings." Gilbert noted that the options market is "expecting potentially a 6 percent move". According to the strategist, "This is greater than what we've typically seen over the last eight quarters of around 4 percent." Shares of Boeing may have fallen into the red yesterday as the stock sympathized with rival Lockhead Martin which sank after revealing a shortfall in cash. ITA, the iShares Aerospace and Defense ETF has seen gains of 6.4 percent year to date. It saw a 34% increase in 2017. Last year Boeing saw a gain of almost 90% and was the best performer in the Dow Jones Industrial Average.
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Our Actionable Research on Lockheed Martin Corporation (NYSE: LMT) and The Boeing Company (NYSE: BA) can be downloaded free of charge at Research Driven Investing.
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