01—Abstract
Summary
Summary of the 10-Q filed July 23, 2024. Cited figures are marked; the original filing is the authoritative source.
Lockheed Martin Corporation (LMT) reported solid financial results for the second quarter and first half of 2024, demonstrating revenue growth and strong operational performance across its key segments.
Total net sales increased by approximately 8% for the quarter and 11% for the six-month period year-over-year, driven by robust demand in Aeronautics, Missiles and Fire Control, and Rotary and Mission Systems. Net earnings for the quarter were $1.64 billiona, or $6.85 per diluted share, a slight decrease from the prior year's $1.68 billion ($6.63 per diluted share), but earnings per share showed an increase due to fewer outstanding shares. The company continues to benefit from a strong geopolitical environment, leading to increased demand for its defense products and services, particularly for munitions replenishment and strategic defense systems.
Financially, Lockheed Martin maintained a healthy balance sheet with significant cash and cash equivalents, and strong operating cash flow. The company returned substantial capital to shareholders through dividends and share repurchases, underscoring its commitment to shareholder value.
Despite persistent supply chain challenges and inflationary pressures impacting the broader industry, LMT has effectively managed these headwinds through strategic initiatives and operational efficiencies. The company's outlook remains positive, supported by a substantial backlog and continued demand across its diverse portfolio, though ongoing uncertainties in government appropriations and geopolitical events warrant close monitoring.
02—Key points
Key Highlights
- Total net sales for the quarter increased by 8.6% to $18.12 billion, and for the six months increased by 11.0% to $35.32 billion, compared to the prior year periods.
- Net earnings for the quarter were $1.64 billion ($6.85 per diluted share), compared to $1.68 billion ($6.63 per diluted share) in the prior year. For the six months, net earnings were $3.19 billion ($13.24 per diluted share), down from $3.37 billion ($13.24 per diluted share) in the prior year.
- Operating profit for the quarter rose 0.6% to $2.15 billion, and for the six months increased 0.1% to $4.18 billion, with notable growth in the Missiles and Fire Control and Space segments.
- The company repurchased approximately $1.9 billion of common stock and paid $1.5 billion in dividends during the first six months of 2024, demonstrating strong capital return to shareholders.
- Contract assets increased by $724 million in the first six months of 2024, reflecting revenue recognized that has not yet been billed to customers.
- The company has $158.3 billion in backlog as of June 30, 2024, with approximately 36% expected to be recognized as revenue over the next 12 months.
- Impairment and severance charges of $87 million were recorded in the second quarter of 2024, primarily related to a strategic review of the Sikorsky business and impacts from the U.S. Army's cancellation of the FARA program.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, Lockheed Martin kept $0.09.
- Revenue$18.12B100.0%
- Cost of revenue−$15.99B88.2%
- Gross profit$2.13B11.8%
- Operating costs$18.0M0.1%
- Operating income$2.15B11.9%
- Interest, other & tax−$507.0M2.8%
- Net income$1.64B9.1%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed July 23, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $18.12B$16.69B | +8.6% |
| Cost of Revenue | $15.99B$14.60B | +9.5% |
| Gross Profit | $2.13B$2.09B | +1.9% |
| Operating Income | $2.15B$2.13B | +0.6% |
| Net Income | $1.64B$1.68B | −2.4% |
| EPS (Basic) | $6.87$6.65 | +3.3% |
| EPS (Diluted) | $6.85$6.63 | +3.3% |
| Shares Outstanding (Basic) | 238.90M252.80M | −5.5% |
| Shares Outstanding (Diluted) | 239.60M253.60M | −5.5% |
05—Questions
Frequently Asked Questions
How did Lockheed Martin's revenue perform in the second quarter of 2024 compared to the same period last year?
Lockheed Martin's total net sales for the second quarter of 2024 increased by 8.6% to $18.12 billion, up from $16.69 billion in the second quarter of 2023. This growth was driven by increases across most of its business segments, particularly Aeronautics, Missiles and Fire Control, and Rotary and Mission Systems.
What was the impact of the U.S. Army's cancellation of the FARA program on the company?
The U.S. Army's decision to cancel the Future Attack Reconnaissance Aircraft (FARA) program, which Lockheed Martin's Sikorsky business was competing for, resulted in $87 million in impairment and severance charges during the second quarter of 2024. This included $50 million for trademark impairment and the remainder for severance costs, impacting the Sikorsky business unit.
How is the company managing supply chain challenges and inflation?
Lockheed Martin is actively working to mitigate supply chain challenges and inflationary pressures through various strategies, including supporting small and at-risk suppliers, securing materials via long-term contracts, identifying alternative sources, collaborating with customers, and optimizing its supply chain organization. Despite these efforts, these factors continue to present risks, particularly for fixed-price contracts.
What is the company's outlook regarding its backlog and future revenue?
Lockheed Martin reported a significant backlog of $158.3 billion as of June 30, 2024. The company expects to recognize approximately 36% of this backlog as revenue over the next 12 months and about 60% over the next 24 months, indicating a strong revenue pipeline driven by ongoing demand for its products and services.
06—Continue