LMT - Why did Lockheed surge today? Q3 earnings beat buyback plan sends stock flying

Lockheed Martin ( NYSE: LMT ) soared Tuesday to its biggest daily gain in more than two years, closing +8.7% after beating Q3 earnings estimates and increasing its stock buyback authorization by $14B.

Q3 adjusted earnings came in at a stronger than expected $6.87/share, and cash flow from operations jumped 62% to $3.13B, but net sales of $15.68B narrowly missed analyst consensus estimates.

The stock held up even after executives said on the earnings conference call that the company does not expect sales growth to return until 2024, as a recovery from supply chain problems and lingering effects from COVID-19 will be "more gradual than previously expected," driving flat sales in 2023.

CFO Jay Malave said Lockheed's ( LMT ) aeronautics sector sales likely will fall slightly next year, due to lower production volume on the F-35, with deliveries of the fighter expected to come in flat, but Malave said that would be because the company recorded sales in advance with long-lead procurements, which should lessen in 2024.

The CFO said Lockheed's ( LMT ) work on classified programs will be a bright spot next year, and CEO Jim Taiclet also said both classified programs and programs of record will "ramp up from 2023 to 2024 meaningfully," accounting for most of the company's growth in 2024.

Lockheed's ( LMT ) results sparked a rally in other aerospace and defense stocks, including ( NOC ) +6.6% , ( LHX ) +5.8% , ( KAMN ) +5.4% , ( GD ) +3.8% , ( RTX ) +3.4% , ( LDOS ) +2.8% , ( TDG ) +2.8% , ( AJRD ) +2.6% , ( HXL ) +2.2% .

Last month, Lockheed ( LMT ) hiked its quarterly dividend to $3.00/share from $2.80 previously .

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