Summary
Lockheed Martin Corporation (LMT) reported its second quarter and first six months results for the period ending June 28, 2009. For the quarter, net sales increased slightly to $11.2 billion from $11.0 billion in the prior year, while net earnings decreased to $734 million ($1.88 per share) from $882 million ($2.15 per share). For the six-month period, net sales grew to $21.6 billion from $21.0 billion, but net earnings declined to $1.4 billion ($3.55 per share) from $1.6 billion ($3.90 per share). The company experienced a decrease in operating profit for both the quarter and the six-month period. This was primarily attributed to higher unallocated corporate costs, particularly related to pension adjustments, and a reduction in other income. Segment-wise, while Aeronautics showed a stronger quarter, Electronic Systems and Space Systems saw declines in sales and operating profit. Information Systems & Global Services (IS&GS) reported increased net sales but a decrease in operating profit. Despite the earnings dip, Lockheed Martin maintained a strong liquidity position with $2.7 billion in cash and cash equivalents. The company continued its capital deployment strategy, repurchasing shares and paying dividends, though at a slightly lower pace for share repurchases compared to the prior year. Management highlighted ongoing assessments of the defense budget and its potential impact, with certain programs like the Joint Strike Fighter and AEHF satellite program expected to receive stable or increased support, while others like the VH-71 Presidential Helicopter and TSAT program were terminated.
Financial Highlights
48 data points| Revenue | $10.94B |
| Cost of Revenue | $10.06B |
| Gross Profit | $1.01B |
| Operating Income | $1.06B |
| Interest Expense | $74.00M |
| Net Income | $734.00M |
| EPS (Basic) | $1.90 |
| EPS (Diluted) | $1.88 |
| Shares Outstanding (Basic) | 386.90M |
| Shares Outstanding (Diluted) | 390.90M |
Key Highlights
- 1Net sales for the second quarter of 2009 increased by 2% year-over-year to $11.2 billion, while net sales for the first six months increased by 3% to $21.6 billion.
- 2Net earnings decreased by 17% for the second quarter to $734 million ($1.88 per diluted share) and by 13% for the first six months to $1.4 billion ($3.55 per diluted share), compared to the prior year.
- 3Operating profit declined by 21% for the quarter to $1.08 billion and by 16% for the six-month period to $2.14 billion, impacted by higher unallocated corporate costs, including pension adjustments.
- 4The company continues to manage its capital structure, with cash and cash equivalents of $2.7 billion at June 28, 2009.
- 5Share repurchases for the first six months of 2009 totaled $969 million, down from $1.93 billion in the same period of 2008, while dividends paid increased to $449 million from $340 million.
- 6Several significant legal proceedings are ongoing, including a contract dispute with the U.K. Ministry of Defence and a breach of contract claim against the N.Y. Metropolitan Transportation Authority.
- 7The company is actively assessing the impact of the U.S. Fiscal Year 2010 defense budget proposal, with some key programs expected to see continued or increased funding, while others face termination or restructuring.