Lockheed Martin takes off in premarket trading, can it keep soaring?

Boosted by a net income increase of 47%, the nation's top defense contractor, Lockheed Martin Corp. (NYSE: LMT), is looking for a strong start to the day. Currently, in the premarket, traders have pushed the stock up 3.0% after this morning's release.

Wall Street was looking for the company to come in with $1.24 a share in earnings, but LMT shattered that estimate with a reported $1.46. In addition, full year 2006 estimates are now being lifted to $5.45 to $5.60 a share from $5.10 to $5.30. Consensus estimates on 2006 earnings is currently sitting at $5.29.

The question is how will this carry into the trading day? Net income may have beat expectations, but sales did not. The company was expected to report $9.83 billion in sales, but came in at only $9.61. While this was still a nice 4% jump, we will have to see how the market takes that once the stock is being actively traded on the open market following the opening bell.

Much of the recent jump in income comes from the company being able to make advances in the production of the F-35 fighter plane, their next generation multi military branch combat jet. The company's most popular and well known jet, the F-16 fighter, saw sales fall last quarter. This partly led to the company missing its sales target as the aeronautics division reported a decline in sales of 7%. Luckily for LMT, this drop was counter-balanced by a 10% rise in sales from their systems and information-technology group, which is their largest division.

All in all, a pretty positive release, but how investors will reward the company for beating earnings estimates while missing sales remains to be seen.