Summary
Lockheed Martin Corporation's (LMT) second-quarter 2021 report (filed July 26, 2021) shows a solid increase in net sales and net earnings compared to the same period in the prior year. Total net sales grew by 5% to $17.0 billion for the quarter and 4% to $33.3 billion for the first six months, driven by growth across all segments, particularly in Space and Rotary and Mission Systems. Net earnings also saw a healthy increase, rising to $1.8 billion ($6.52 per diluted share) for the quarter and $3.7 billion ($13.08 per diluted share) for the six months, up from $1.6 billion and $3.3 billion respectively in the prior year. While the company reported a significant loss of $225 million on a classified program in the Aeronautics segment, this was partially offset by gains in other areas and the overall positive sales and earnings performance. The company is proceeding with its planned acquisition of Aerojet Rocketdyne, currently expected to close in Q4 2021, subject to regulatory approval. The company also reaffirmed its 2021 financial outlook, expecting mid-single digit sales growth and maintaining its operating profit margin target, though it acknowledges ongoing uncertainties related to COVID-19 and U.S. government funding. Investors should note the continued strong performance in core segments, healthy cash generation, and commitment to returning capital through dividends and share repurchases. However, the ongoing risks associated with government contracts, potential program performance issues, and the significant Aerojet Rocketdyne acquisition warrant close monitoring.
Financial Highlights
46 data points| Revenue | $17.03B |
| Cost of Revenue | $14.88B |
| Gross Profit | $2.15B |
| Operating Income | $2.19B |
| Interest Expense | $142.00M |
| Net Income | $1.81B |
| EPS (Basic) | $6.54 |
| EPS (Diluted) | $6.52 |
| Shares Outstanding (Basic) | 277.40M |
| Shares Outstanding (Diluted) | 278.40M |
Key Highlights
- 1Total net sales increased 5% to $17.0 billion for the quarter and 4% to $33.3 billion for the six months ended June 27, 2021, compared to the prior year periods.
- 2Net earnings increased to $1.8 billion ($6.52 per diluted share) for the quarter and $3.7 billion ($13.08 per diluted share) for the six months, demonstrating improved profitability.
- 3The company reported a $225 million loss on a classified program in the Aeronautics segment, impacting profitability for the quarter.
- 4Lockheed Martin is on track with its planned acquisition of Aerojet Rocketdyne, with an expected closing in the fourth quarter of 2021, pending regulatory approvals.
- 5Net cash provided by operating activities was $3.0 billion for the six months, though this was a decrease from the $4.5 billion generated in the same period last year, primarily due to working capital changes.
- 6The company continued to return capital to shareholders, paying $1.5 billion in dividends and repurchasing $1.5 billion in stock during the six months ended June 27, 2021.
- 7Backlog remained strong at $141.7 billion as of June 27, 2021, indicating significant future revenue potential.