01—Abstract
Summary
Summary of the 10-Q filed October 22, 2024. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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 billionb at the end of the quarter, providing good visibility for future revenue.
02—Key points
Key Highlights
- Total 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.
- Diluted earnings per share for Q3 2024 were $6.80, and $20.05 for the first nine months, demonstrating consistent profitability.
- Significant backlog of $165.7 billion provides strong revenue visibility for future periods.
- Operating cash flow remained robust, with $5.9 billion generated in the first nine months of 2024, supporting strategic initiatives.
- The company repurchased $2.7 billion of common stock in the first nine months of 2024 and increased its quarterly dividend, returning value to shareholders.
- Aeronautics segment saw a slight dip in quarterly sales due to program funding delays, but overall segment performance remained stable.
- Missiles 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.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2024, Lockheed Martin kept $0.09.
- Revenue$17.10B100.0%
- Cost of revenue−$14.99B87.6%
- Gross profit$2.12B12.4%
- Operating costs$23.0M0.1%
- Operating income$2.14B12.5%
- Interest, other & tax−$517.0M3.0%
- Net income$1.62B9.5%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed October 22, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $17.10B$16.88B | +1.3% |
| Cost of Revenue | $14.99B$14.83B | +1.1% |
| Gross Profit | $2.12B$2.05B | +3.4% |
| Operating Income | $2.14B$2.04B | +4.8% |
| Net Income | $1.62B$1.68B | −3.6% |
| EPS (Basic) | $6.83$6.75 | +1.2% |
| EPS (Diluted) | $6.80$6.73 | +1.0% |
| Shares Outstanding (Basic) | 237.50M249.30M | −4.7% |
| Shares Outstanding (Diluted) | 238.60M250.20M | −4.6% |
05—Questions
Frequently Asked Questions
What were the primary drivers of revenue growth in the most recent quarter?
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.
How is the company managing supply chain challenges and inflation?
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.
What is the status of the F-35 program and its impact on Lockheed Martin?
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.
How is Lockheed Martin returning value to shareholders?
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.
06—Continue