Defense contractors roll out quarterly updates this week and should provide outlooks for their first year under the second Trump administration. Northrop Grumman posted mixed results early Thursday. L3Harris edged out expectations but lowered its earnings outlook. General Dynamics beat views Wednesday. RTX topped Q4 estimates Tuesday while Lockheed Martin fell after missing earnings.
Northrop Grumman
Northrop Grumman reported earnings of $6.39 per share adjusted, up from $6.27 per share, while revenue ticked up slightly to $10.69 billion. Analysts expected earnings of $6.35 per share on $10.97 billion in sales.
The company forecasts 2025 sales range from $42 billion to $42.5 billion, just below FactSet estimates for $42.77 billion. Northrop Grumman sees full-year adjusted earnings between $27.85 to $28.25 per share. FactSet expects 2025 earnings of $28.12 per share adjusted.
NOC stock ticked up slightly Thursday on results.
Shares dipped below their 200-day line on Wednesday and are trading just above their 50-day line.
L3Harris
L3Harris reported earnings of $3.47 per share adjusted on $5.52 billion in revenue
FactSet expected earnings of $3.42 per share, up 2% from last year on 3% revenue growth to $5.5 billion.
L3Harris cut its 2025 earnings guidance to range from $10.55 to $10.85 per share adjusted, down from its previous forecast for $13.70 to $14 per share. The new outlook excludes adjustments for the amortization of acquisition-related intangible assets.
The company expects revenue will range from $21.8 billion to $22.2 billion. FactSet had expected 2025 earnings of $14.11 per share adjusted on $21.79 billion in revenue.
LHX stock was flat Thursday. L3Harris is trading below its key moving averages.
Through Wednesday's close, shares are down 20% from their record high of 265.74 on Nov. 11.
General Dynamics
General Dynamics reported a 14% increase in earnings to $4.15 per share on 14.2% revenue growth to $13.3 billion. The results topped FactSet expectations for a 12% increase in earnings on about 10% sales growth.
The company's aerospace revenue leapt 36.4%, while marine systems revenue increased 16.2%. Combat systems rose 1.3% and technologies sales climbed 2.8%.
Gulfstream delivered 47 aircraft during the quarter, bringing the total for the year to 136.
General Dynamics ended the year with a backlog of $90.6 billion. General Dynamics also has about $53.4 billion in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and options.
GD stock climbed 2.2% Thursday, after retreating 4.6% Wednesday on results.
Shares have fallen about 21% from their record high of 316.90 on Nov. 13.
RTX
RTX reported a 19% increase in earnings to $1.54 per share adjusted on 9% revenue growth to $21.6 billion.
FactSet expected earnings of $1.38 per share on $20.54 billion in revenue.
RTX averaged 11.7% earnings growth over the past three quarters, with an average 23% revenue gain during that period.
Collins Aerospace sales rose to $7.54 billion, while revenue for the Pratt & Whitney segment jumped 18% to $7.57 billion. Raytheon revenue climbed 4% to $7.16 billion.
For its 2025 guidance, RTX expects earnings to range from $6 to $6.15 per share adjusted while revenue ranges from $83 billion to $84 billion. The revenue outlook came up just short of FactSet views for $84.43 billion. The midpoint of RTX's earnings guidance is also below analyst estimates of $6.09 per share adjusted.
Meanwhile, RTX is among the companies weighing a potential bid for Boeing's aviation software unit Jeppesen, Bloomberg reported last week. Honeywell, Blackstone, Carlyle Group, GE Aerospace and TransDigm Group are also reportedly interested in acquiring it. Deliberations are ongoing and it is unclear which suitor will submit a formal bid. Jeppesen, which provides interactive flight plans, could fetch $6 billion to $8 billion for Boeing.
Shares of RTX swung 2.7% higher Tuesday to 128.36. The stock is trading near a 128.70 buy point for a cup base following a two-week advance.
The entry matches RTX's record high from Oct. 22.
Lockheed Martin
Lockheed Martin reported earnings of $2.22 per share, down from $7.58 per share last year. Revenue eased to $18.62 billion, marking three quarters of declining sales growth.
FactSet expected a 16% decline in earnings to $6.62 per share on $18.87 billion in revenue.
During the quarter, Lockheed recognized a $410 million loss on classified programs within its aeronautics business segment, following a review of technical requirements and upcoming milestones. The company also recognized a loss of $100 million related to a program in its missiles and fire control business, bringing the the program's total loss for the year to $1.4 billion.
Lockheed Martin guided 2025 earnings between $27 and $27.30 per share, below FactSet views for $27.88 per share. The company forecasts net sales range from $73.75 billion to $74.75 billion, with the midpoint just above analyst expectations for $74.11 billion.
Elsewhere, Lockheed on Jan. 22 received a $270 million contract from the U.S. Air Force to integrate next-generation infrared defensive sensors on the F-22 Raptor.
LMT stock tumbled 9.2% Tuesday. Lockheed Martin stock climbed 1.4% Monday.
LMT stock has fallen 26% from its record high of 618.95 on Oct. 21.
Analyst Forecasts
Citi analyst Jason Gursky on Jan. 20 noted that he expects results from defense contractors will be "somewhat balanced," The Fly reported. Citi anticipates positive commentary regarding demand from Europe, but a level of caution on the U.S. given the Presidential transition. Meanwhile, the new Department of Government Efficiency is an overhanging risk to the industry, analysts say.
The new DOGE department, being led by Tesla and SpaceX CEO Elon Musk, has promised to curtail spending and implement a range of cost reduction efforts across various government functions.
Baird on Jan. 14 said it predicts "mixed results" across defense stocks in 2025. Still, the firm is bullish on defense technology players that are focusing on low-cost, next-generation solutions.
Elsewhere, Bernstein in early January noted that DOGE's efforts and the potential for a more isolationist posture prompted a sharp decline in many defense names since Trump's reelection win. However, the firm noted that lower valuations makes the defense group more attractive. Bernstein also expects the administration to support strong defense capabilities.
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