Summary
Lockheed Martin Corporation reported solid top-line growth in its third quarter of 2009, with net sales increasing by 5% year-over-year to $11.1 billion. This growth was driven by increases across all four business segments: Electronic Systems, Information Systems & Global Services (IS&GS), Aeronautics, and Space Systems. Despite revenue growth, operating profit saw a 13% decline compared to the prior year, primarily due to higher unallocated corporate costs, including increased pension expenses, and a reduction in other income. The company highlighted potential impacts from the U.S. government's fiscal year 2010 budget, noting both program expansions and potential cancellations such as the VH-71 Presidential Helicopter and the Transformational Satellite (TSAT) program. However, Lockheed Martin indicated that contract terminations for convenience are not expected to have a material adverse effect on the Corporation as a whole. Financially, the company demonstrated strong cash flow from operations, increasing by $354 million for the first nine months of 2009 compared to the same period in 2008. This robust cash generation supported significant share repurchases and an increase in dividend payouts, signaling a commitment to returning value to shareholders. The company also maintained a strong liquidity position with approximately $2.7 billion in cash and cash equivalents and an undrawn $1.5 billion revolving credit facility. Management remains confident in their access to capital resources and their ability to fund operations and capital expenditures.
Financial Highlights
48 data points| Revenue | $10.77B |
| Cost of Revenue | $9.78B |
| Gross Profit | $986.00M |
| Operating Income | $1.07B |
| Interest Expense | $74.00M |
| Net Income | $797.00M |
| EPS (Basic) | $2.09 |
| EPS (Diluted) | $2.07 |
| Shares Outstanding (Basic) | 381.40M |
| Shares Outstanding (Diluted) | 385.50M |
Key Highlights
- 1Net sales increased by 5% to $11.1 billion in Q3 2009 compared to Q3 2008, with growth across all business segments.
- 2Operating profit decreased by 13% to $1,085 million, impacted by higher unallocated corporate costs and reduced other income.
- 3Net earnings for Q3 2009 were $797 million ($2.07 per share), a slight increase from $782 million ($1.92 per share) in Q3 2008.
- 4Cash provided by operating activities increased by $354 million for the first nine months of 2009, indicating strong operational cash generation.
- 5The company repurchased $1,362 million in common shares and increased quarterly dividends to $0.57 per share in the first nine months of 2009.
- 6Lockheed Martin is closely monitoring the U.S. FY2010 budget, with potential impacts from program expansions (e.g., Joint Strike Fighter, AEHF) and cancellations (e.g., VH-71, TSAT).
- 7Contract terminations for convenience, specifically for the VH-71 and TSAT programs, are not anticipated to have a material adverse effect on the Corporation.