10-QPeriod: Q3 FY2007

LOCKHEED MARTIN CORP Quarterly Report for Q3 Ended Sep 30, 2007

Filed October 26, 2007For Securities:LMT

Summary

Lockheed Martin Corporation reported strong financial results for the nine months ended September 30, 2007, with net sales increasing by 8% to $31.0 billion and net earnings growing by 24% to $2.23 billion ($5.21 per diluted share). The company saw significant revenue growth across all its business segments: Aeronautics, Electronic Systems, Information Systems & Global Services (IS&GS), and Space Systems. This growth was driven by increased volumes in key programs and strategic acquisitions. The company also demonstrated robust cash flow generation, with net cash provided by operating activities reaching $3.82 billion for the nine-month period, enabling substantial share repurchases and dividend payments to shareholders. The balance sheet remains solid, with total stockholders' equity increasing to $7.43 billion. Management expressed confidence in its ability to meet future operating, capital expenditure, and debt service requirements.

Key Highlights

  • 1Net sales for the first nine months of 2007 increased by 8% to $31.0 billion compared to the same period in 2006.
  • 2Net earnings for the first nine months of 2007 rose by 24% to $2.23 billion, or $5.21 per diluted share.
  • 3All four business segments (Aeronautics, Electronic Systems, IS&GS, Space Systems) reported sales increases, indicating broad-based growth.
  • 4Net cash provided by operating activities was $3.82 billion for the nine months ended September 30, 2007, up from $3.45 billion in the prior year.
  • 5The company repurchased $1.8 billion of its common stock during the first nine months of 2007, demonstrating a commitment to returning capital to shareholders.
  • 6Total stockholders' equity increased to $7.43 billion as of September 30, 2007, reflecting strong earnings retention and other comprehensive income.
  • 7The company raised its quarterly dividend to $0.42 per share, signaling confidence in future performance.

Frequently Asked Questions

For the nine months ended September 30, 2007, Lockheed Martin reported net sales of $31.0 billion, an 8% increase compared to the prior year's $28.8 billion. Net earnings for the period were $2.23 billion, a significant 24% increase from $1.80 billion in the same period last year. Diluted earnings per share were $5.21, up from $4.12.

All four of Lockheed Martin's business segments – Aeronautics, Electronic Systems, Information Systems & Global Services (IS&GS), and Space Systems – experienced sales growth. This indicates a broad-based improvement across the company's diverse operations, driven by increased volumes and strategic acquisitions within segments like IS&GS.

Lockheed Martin generated strong operating cash flow, with $3.82 billion provided by operating activities in the first nine months of 2007, an increase from the previous year. The company actively deployed capital by repurchasing $1.8 billion of its common stock, paying $440 million in dividends, and investing in capital expenditures. They also announced an increase in their quarterly dividend to $0.42 per share.

The company is involved in various legal proceedings and environmental matters, as detailed in Note 6. While management believes the probability of a material adverse effect on financial results is remote for most matters, the outcomes of legal proceedings cannot be predicted with certainty. Notably, the company is addressing environmental remediation obligations and is involved in litigation related to former facilities and contractual disputes. While these are ongoing, they are being actively managed and disclosed.