Summary
Lockheed Martin Corporation (LMT) reported strong financial performance for the third quarter and the first nine months of 2016. Net sales from continuing operations significantly increased year-over-year, driven by growth in the Aeronautics and Rotary and Mission Systems (RMS) segments. This growth was substantially bolstered by the acquisition of Sikorsky, which closed in late 2015 and is now fully reflected in the RMS segment's results. The divestiture of the Information Systems & Global Solutions (IS&GS) segment was completed in August 2016, and its results are now classified as discontinued operations, contributing a significant gain to net earnings for the period. Profitability also saw a considerable improvement, particularly due to the gain from the IS&GS divestiture and strong performance in the Space Systems segment, which included a gain from increased ownership in the AWE venture. Diluted earnings per share from continuing operations showed a healthy increase. The company continues to focus on cash generation and return of capital to shareholders, with a substantial remaining authorization for share repurchases and consistent dividend payments. Management expressed confidence in the company's outlook, citing program growth and strategic positioning.
Financial Highlights
45 data points| Revenue | $11.55B |
| Cost of Revenue | $10.17B |
| Gross Profit | $1.38B |
| Operating Income | $1.59B |
| Interest Expense | $162.00M |
| Net Income | $2.40B |
| EPS (Basic) | $8.02 |
| EPS (Diluted) | $7.93 |
| Shares Outstanding (Basic) | 298.50M |
| Shares Outstanding (Diluted) | 302.10M |
Key Highlights
- 1Total net sales increased by 14.9% to $11.55 billion for the third quarter of 2016 compared to $10.06 billion in the prior year period.
- 2Net earnings saw a substantial jump to $2.40 billion ($7.93 per diluted share) in Q3 2016, compared to $0.87 billion ($2.77 per diluted share) in Q3 2015, largely driven by a significant gain from the divestiture of the IS&GS business segment.
- 3The acquisition of Sikorsky, integrated into the Rotary and Mission Systems (RMS) segment, significantly boosted net sales, contributing approximately $1.2 billion in product sales for the quarter.
- 4Operating profit from continuing operations increased by 33.2% to $1.59 billion in the third quarter of 2016, up from $1.19 billion in the prior year.
- 5The company generated $4.46 billion in net cash from operating activities for the first nine months of 2016, an increase from $3.74 billion in the same period of 2015.
- 6Lockheed Martin announced an increase in its share repurchase program by $2.0 billion, with a remaining authorization of $4.3 billion as of September 25, 2016.
- 7The divestiture of the IS&GS business segment was completed on August 16, 2016, resulting in a net gain of approximately $1.2 billion, now classified under discontinued operations.