What drove the increase in Net Sales?

Net sales increased by 3% to $10.63 billion primarily due to a 2% increase in product sales and a 6% increase in services sales. Growth was observed in the Aeronautics and Electronic Systems segments for products, and in Electronic Systems and IS&GS for services.

Why did Operating Profit decrease despite higher sales?

Operating profit decreased by 9% to $852 million primarily due to an increase in the FAS/CAS pension adjustment, which added approximately $120 million compared to the prior year's quarter. This was partially offset by increased operating profit in the Electronic Systems and Space Systems segments.

What is the company's outlook regarding government funding and potential budget impacts?

The company noted that the U.S. Government reached an agreement on a appropriations bill for fiscal year 2011 that was $38 billion below the President's request. Lockheed Martin currently does not expect these reductions to have a material effect on its operations in 2011, and operating under continuing resolutions for the first six months of the fiscal year also did not materially impact operations.

How is Lockheed Martin managing its capital and returning value to shareholders?

The company generated strong operating cash flows of $1.68 billion. It declared and paid dividends totaling $266 million and repurchased shares for $314 million in the quarter. Furthermore, a new $3 billion share repurchase program was authorized, demonstrating a commitment to shareholder returns.

LMT 10-Q Quarterly Report Q1 FY2011 — Revenue, Net Income, EPS

Summary

Lockheed Martin Corporation reported solid financial results for the first quarter ended March 27, 2011. Net sales increased by 3% year-over-year to $10.6 billion, driven by growth in both product and service sales across key segments. While overall operating profit saw a slight decrease of 9% to $852 million, largely due to an increase in the FAS/CAS pension adjustment, the Electronic Systems and Space Systems segments showed improved operating profit. Diluted earnings per share from continuing operations rose to $1.55, up from $1.38 in the prior year, reflecting the company's ability to grow profitability even amidst evolving market conditions and a shifting program mix within its Aeronautics segment.

Financial Highlights

46 data points

Beta

Revenue

$10.63B

0.1% Gross Margin

Net Income

$530.00M

0.0% Net Margin

EPS (Diluted)

$1.50

Total Assets

$36.68B

Cash & Equivalents

$3.36B

Free Cash Flow

$1.59B

Financial Statements

Beta

Revenue	$10.63B
Cost of Revenue	$9.81B
Gross Profit	$814.00M
Operating Income	$880.00M
Interest Expense	$85.00M
Net Income	$530.00M
EPS (Basic)	$1.52
EPS (Diluted)	$1.50
Shares Outstanding (Basic)	348.50M
Shares Outstanding (Diluted)	352.60M

Key Highlights

1Total Net Sales increased by 3% to $10.63 billion, compared to $10.34 billion in the prior year's quarter.
2Earnings Per Diluted Share from continuing operations rose to $1.55, an increase from $1.38 in the same quarter last year.
3The company announced a new share repurchase program with authorization for $3 billion, indicating a commitment to returning capital to shareholders.
4Cash and cash equivalents significantly increased to $3.36 billion, up from $2.26 billion at the end of the prior year.
5Electronic Systems and Space Systems segments reported increased operating profit, signaling strength in these core areas.
6A change in accounting for U.S. Government services contracts to the percentage-of-completion method was implemented, with prior periods adjusted, though not materially impacting results.
7Discontinued operations, related to the divestiture of PAE and EIG, resulted in a net loss of $18 million for the quarter.

LOCKHEED MARTIN CORP Quarterly Report for Q1 Ended Mar 27, 2011

Summary

Financial Highlights

Key Highlights

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