What were the primary drivers for the decrease in net sales during the first quarter of 2022?

The primary drivers for the decrease in net sales were lower product sales across the Rotary and Mission Systems (RMS), Space, and Missiles and Fire Control (MFC) segments. Specific factors included the completion of international pilot training systems, the renationalization of the Atomic Weapons Establishment (AWE) program, and lower volumes in programs like THAAD and PAC-3. Supply chain disruptions also negatively impacted net sales.

How did the company manage its cash during the quarter?

The company's cash and cash equivalents decreased to $1.88 billion at the end of the quarter from $3.60 billion at the beginning. Net cash provided by operating activities was $1.41 billion. However, significant cash outflows were driven by $2.0 billion in share repurchases and $0.77 billion in dividends paid. The company believes its cash position, operating cash flow, and access to credit markets are sufficient for its needs.

What is the outlook for U.S. government funding and its impact on Lockheed Martin?

The U.S. government funding environment remains strong. The Consolidated Appropriations Act of 2022 provided $781 billion for national defense. The FY 2023 budget request proposes an 8% increase for national defense. Lockheed Martin's programs are generally well-supported by these budgets, and the company anticipates continued support for its offerings.

Are there any significant legal proceedings or contingencies that could impact the company?

The company is involved in ongoing litigation and environmental proceedings. While management believes the probability of a material adverse effect on the corporation as a whole from these matters is remote, unfavorable resolutions could impact net earnings and cash flows in specific periods. The company is also subject to U.S. government audits and investigations, which could lead to liabilities, though many result in no adverse action.

LMT 10-Q Quarterly Report Q1 FY2022 — Revenue, Net Income, EPS

Summary

Lockheed Martin Corporation (LMT) reported its first-quarter 2022 financial results, indicating a sequential decrease in net sales and earnings compared to the prior year's quarter. Net sales for the quarter ended March 27, 2022, were $14.96 billion, down from $16.26 billion in the same period of 2021. This decline was primarily driven by lower product sales across multiple segments, including Rotary and Mission Systems (RMS), Space, and Missiles and Fire Control (MFC), influenced by factors like the completion of specific programs and supply chain disruptions. Diluted earnings per share also saw a slight decrease to $6.44 from $6.56 year-over-year. Despite the top-line decline, the company demonstrated robust operational performance. The operating profit remained strong, supported by favorable profit adjustments and equity earnings from its joint venture, United Launch Alliance (ULA). The company continued its commitment to shareholder returns, returning $2.80 per share in dividends and engaging in significant share repurchases. Management expressed confidence in the company's liquidity and ability to meet future cash requirements, supported by operating cash flows and access to credit markets. The company also highlighted the ongoing favorable U.S. government funding environment and its strategic positioning for future growth, particularly in the Aeronautics and Space segments.

Financial Highlights

43 data points

Beta

Revenue

$14.96B

0.1% Gross Margin

Net Income

$1.73B

0.1% Net Margin

EPS (Diluted)

$6.44

Total Assets

$51.51B

Cash & Equivalents

$1.88B

Free Cash Flow

$1.41B

Financial Statements

Beta

Revenue	$14.96B
Cost of Revenue	$13.05B
Gross Profit	$1.91B
Operating Income	$1.93B
Interest Expense	$135.00M
Net Income	$1.73B
EPS (Basic)	$6.46
EPS (Diluted)	$6.44
Shares Outstanding (Basic)	268.30M
Shares Outstanding (Diluted)	269.20M

Key Highlights

1Total net sales decreased by 8.0% to $14.96 billion in Q1 2022 from $16.26 billion in Q1 2021.
2Net earnings decreased to $1.73 billion ($6.44 per diluted share) in Q1 2022 from $1.84 billion ($6.56 per diluted share) in Q1 2021.
3Product sales saw a significant drop of 9.0% to $12.49 billion, mainly due to lower volumes in RMS, Space, and MFC segments.
4Operating profit decreased by 11.4% to $1.93 billion, impacted by lower sales and profit adjustments across several segments.
5The company repurchased $2.0 billion of its common stock in Q1 2022 under an accelerated share repurchase agreement.
6Cash and cash equivalents decreased to $1.88 billion as of March 27, 2022, from $3.60 billion as of December 31, 2021.
7Backlog remained strong at $134.2 billion as of March 27, 2022, with approximately 38% expected to be recognized within the next 12 months.

LOCKHEED MARTIN CORP Quarterly Report for Q1 Ended Mar 27, 2022

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions