10-QPeriod: Q3 FY2024

LOCKHEED MARTIN CORP Quarterly Report for Q3 Ended Sep 29, 2024

Filed October 22, 2024For Securities:LMT

Summary

Lockheed Martin Corporation (LMT) reported solid financial results for the third quarter and the first nine months of fiscal year 2024, demonstrating continued revenue growth and robust operational performance. Total net sales for the quarter reached $17.1 billion, an increase from the prior year, driven primarily by growth in the Missiles and Fire Control (MFC) and Rotary and Mission Systems (RMS) segments. For the nine-month period, net sales climbed to $52.4 billion, reflecting strong demand across key programs, particularly in tactical and strike missiles, and integrated warfare systems. Net earnings for the quarter stood at $1.6 billion ($6.80 per diluted share), a slight decrease compared to the prior year quarter, while nine-month net earnings were $4.8 billion ($20.05 per diluted share), showing a modest increase year-over-year. The company's financial health remains strong, with substantial operating cash flow generation supporting ongoing investments, share repurchases, and dividend payments. Management highlighted the continued strength of its backlog, which stood at $165.7 billion at the end of the quarter, providing good visibility for future revenue.

Financial Highlights

46 data points
Beta

Revenue

$17.10B

12.4% Gross Margin

Net Income

$1.62B

9.5% Net Margin

EPS (Diluted)

$6.80

Total Assets

$55.52B

Cash & Equivalents

$3.15B

Free Cash Flow

$2.44B

Financial Statements
Beta
Revenue$17.10B
Cost of Revenue$14.99B
Gross Profit$2.12B
Operating Income$2.14B
Net Income$1.62B
EPS (Basic)$6.83
EPS (Diluted)$6.80
Shares Outstanding (Basic)237.50M
Shares Outstanding (Diluted)238.60M

Key Highlights

  • 1Total net sales increased to $17.1 billion in Q3 2024 and $52.4 billion in the first nine months of 2024, indicating strong top-line performance.
  • 2Diluted earnings per share for Q3 2024 were $6.80, and $20.05 for the first nine months, demonstrating consistent profitability.
  • 3Significant backlog of $165.7 billion provides strong revenue visibility for future periods.
  • 4Operating cash flow remained robust, with $5.9 billion generated in the first nine months of 2024, supporting strategic initiatives.
  • 5The company repurchased $2.7 billion of common stock in the first nine months of 2024 and increased its quarterly dividend, returning value to shareholders.
  • 6Aeronautics segment saw a slight dip in quarterly sales due to program funding delays, but overall segment performance remained stable.
  • 7Missiles and Fire Control (MFC) and Rotary and Mission Systems (RMS) segments showed strong growth in both sales and operating profit, driven by key programs and production ramp-ups.

Frequently Asked Questions

Revenue growth in the third quarter of 2024 was primarily driven by higher product sales at the Rotary and Mission Systems (RMS) segment, due to increased volume in integrated warfare systems and sensors (IWSS), and at the Missiles and Fire Control (MFC) segment, due to production ramp-up on Guided Multiple Launch Rocket Systems (GMLRS) and Long Range Anti-Ship Missile (LRASM) programs.

Lockheed Martin is actively addressing supply chain challenges and inflation by supporting suppliers, securing materials through long-term contracts, identifying alternative sources, collaborating with customers, and optimizing its supply chain organization. These efforts aim to mitigate the impact of rising labor and supplier costs on margins, particularly for fixed-price contracts.

The F-35 program continues to progress with significant international demand and deliveries. As of September 29, 2024, 1,040 aircraft had been delivered. However, negotiations for the Lots 18-19 production contract are ongoing, leading to a temporary inability to recognize revenue and profit on approximately $400 million of costs incurred in Q3 2024 and impacting invoicing and cash collection. The company expects resolution in the fourth quarter of 2024, but continued delays could materially impact results.

Lockheed Martin continues to return value through a disciplined capital deployment strategy. This includes consistent dividend payments, with a recent increase authorized for the fourth quarter of 2024, and significant share repurchases. In the first nine months of 2024, the company repurchased $2.7 billion of its common stock, and its share repurchase program remains substantial.