In short: Good results that the market wouldn't pay for: EPS 768 vs 682 expected, a revenue beat, backlog +$20B to a record $105B, raised EPS guidance — yet "the stock was down on the open anyway, then it recovered. But it was not up on these good results. Why? The cost growth on the company's missile programs seem open-ended and that is hurting current margins."
Northrop is the other defense prime he checked this week — bombers, missiles, space systems. Its quarter was good on paper: earnings beat, revenue beat, order book up $20 billion to a record $105 billion, guidance raised.
The stock still didn't rise, and Eisman explains why: the cost overruns on its missile programs "seem open-ended," and the company absorbs those costs, squeezing today's profit margins. Same war tailwind as Lockheed, but a company-specific problem eating the benefit — hence a neutral read rather than a positive one.
6:57The company reported earnings per share of 768 versus 815 and versus expectations of 682. Revenue beat as well. The backlog increased by 20 billion to reach a record of 105 billion and the company raised EPS guidance. But the stock was down on the open anyway, then it recovered. But it was not up on these good results.
In short: Fourth-best watchlist performer at +23.6% year to date, on a 20.8% five-year CAGR — a defence prime rising while the issue's own framing notes "the war in the Middle East." Not rated Buy; the connection is not drawn in the text.
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