Morning Perspective: Defense! Defense!

Results for Lockheed Martin’s (LMT) first quarter performance came in better than analysts had expected. According to Bloomberg the world’s largest defense company said 1Q profits rose 5.8% to $730 mln, or $1.75 per share, above consensus estimates of $1.63 per share. Revenues increased 7.3% year-over-year to $9.98 bln vs. $9.69 bln consensus. Higher sales of U.S. government computers and revenue from NASA spacecraft helped offset declining shipments of its fighter jets. But the company lowered its guidance for FY08 with EPS in the range of $7.15-7.35 per share. Analysts were expecting EPS of $7.37. For more context on the markets, see Professor Prieur du Plessis’ column Will Earnings Surprises Lift Markets?

From the Bull Pen: Bulls believe LMT may be sandbagging its guidance. Near-term sell-stops, however, may be set below the 200-DMA (104.35).

From the Bear Cave: Bears can play the downside in aircraft lessors like AerCap (AER); buy-stops can be set above $18.80.


More Mickey D’s Please!

McDonald’s (MCD) beat expectations for the first quarter. According to Bloomberg the world’s largest fast food chain said 1Q profits rose to $946 mln, or $0.81 per share, vs. analyst estimates of $0.70. Revenues came in at $5.614 bln vs. $5.4 bln cons. Profits were boosted in part by European comparable store sales which rose 11.1%. Although March comp sales in the U.S. were slightly negative, the company said April figures were up 2%-2.5%. In all, comp sales increased 7.4% for the quarter. Further, the company was mentioned yesterday as one of the top 10 most powerful global brands by the Financial Times. For more, read Professor Kevin Depew’s Five Things You Need To Know.

From the Bull Pen: Professor Jeff Macke has long liked this All-American chain. Those bullish can set near-term sell-stops below $57.50.

From the Bear Cave: Bears can play the downside in Cheesecake Factory (CAKE); buy-stops can be set above $22.80.


For more ideas, check out Minyanville’s Spotlight Stocks.


Quick Check Around the World

Asian trading closed mixed with the Hang Seng +0.88%, Nikkei -1.09%, Sensex +0.27%, Taiwan -0.51% and Shanghai +0.99%.

Glancing towards Europe, we find the CAC +0.09%, DAX -0.01%, FTSE +0.01%

As of 8:30 AM EST, S&P futures are lower -2.3 points to 1386, and Nasdaq futures are down -6.5 points to 1907.


A Look At Commodities

In commodities, Gold is higher +6.90 points to 921.60. Crude oil is higher +0.22 to 117.70. Silver is up +0.275 to 17.635 and copper is up +9.20 to 399.00.

The dollar index is lower -0.078 to 71.578.


On the Radar

Economics

10:00 Existing Home Sales: 4.95 mln cons.
10:00 Existing Home Sales (m/m): -2.3% cons.
10:00 House Price Index (m/m): -1.5% cons.
10:00 Richmond Fed Mfg. Index: 1 cons.

Click here for the full trading radar.

Good luck today!