01—Abstract
Summary
Summary of the 10-Q filed April 22, 2025. Cited figures are marked; the original filing is the authoritative source.
Lockheed Martin Corporation (LMT) reported solid financial results for the quarter ended March 30, 2025, with total sales increasing to $17.96 billiona, up from $17.20 billion in the prior year's comparable quarter.
This growth was primarily driven by a 5% increase in product sales, largely supported by strong performance in the Missiles and Fire Control (MFC) and Rotary and Mission Systems (RMS) segments. Net earnings also saw a significant uplift, reaching $1.71 billionb, or $7.28 per diluted share, compared to $1.55 billion, or $6.39 per diluted share, in the first quarter of 2024. This earnings growth outpaced revenue growth, indicating improved operational efficiency and favorable contract adjustments.
The company continues to navigate a complex geopolitical landscape, with ongoing efforts to manage supply chain challenges and inflationary pressures. Despite these headwinds, LMT demonstrated resilience. The company's robust backlog of $173.0 billionc provides a strong outlook for future revenue.
Key segments like Aeronautics, MFC, and RMS showed increased operating profit, contributing to the overall positive financial performance. While the Space segment experienced a slight dip in sales, its operating profit grew, reflecting effective program management. LMT also continued its commitment to shareholder returns, repurchasing $750 milliond in stock and paying $796 million in dividends, underscoring its financial strength and confidence in its future prospects.
02—Key points
Key Highlights
- Total sales for the quarter increased by 4.5% year-over-year to $17.96 billion, driven primarily by product sales growth.
- Net earnings rose by 10.8% to $1.71 billion, with diluted EPS increasing to $7.28 from $6.39 in the prior year.
- Operating profit for the consolidated business segments grew to $2.085 billion, up from $1.745 billion in Q1 2024.
- The Missiles and Fire Control (MFC) segment showed a notable 13% increase in sales and a 50% surge in operating profit.
- Lockheed Martin maintained a strong backlog of $173.0 billion, with approximately 38% expected to be recognized in revenue over the next 12 months.
- The company returned $1.55 billion to shareholders through dividends ($796 million) and share repurchases ($750 million) during the quarter.
- Free cash flow for the quarter was $955 million, though lower than the prior year's $1.26 billion, primarily due to increased capital expenditures and operating cash flow drivers.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, Lockheed Martin kept $0.10.
- Revenue$17.96B100.0%
- Cost of revenue−$15.64B87.1%
- Gross profit$2.32B12.9%
- Operating costs$49.0M0.3%
- Operating income$2.37B13.2%
- Interest, other & tax−$660.0M3.7%
- Net income$1.71B9.5%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed April 22, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $17.96B$17.20B | +4.5% |
| Cost of Revenue | $15.64B$15.20B | +2.9% |
| Gross Profit | $2.32B$1.99B | +16.6% |
| Operating Income | $2.37B$2.03B | +16.9% |
| Net Income | $1.71B$1.54B | +10.8% |
| EPS (Basic) | $7.30$6.42 | +13.7% |
| EPS (Diluted) | $7.28$6.39 | +13.9% |
| Shares Outstanding (Basic) | 234.40M240.70M | −2.6% |
| Shares Outstanding (Diluted) | 235.30M241.60M | −2.6% |
05—Questions
Frequently Asked Questions
What was the primary driver of the sales increase in the first quarter of 2025?
The primary driver of the sales increase was a 5% rise in product sales, amounting to $14.94 billion, up from $14.20 billion in the prior year's quarter. This growth was particularly strong in the Missiles and Fire Control (MFC) and Rotary and Mission Systems (RMS) segments, fueled by production ramp-ups on key programs.
How did the company manage supply chain and inflationary pressures during the quarter?
Lockheed Martin continued to address supply chain challenges and inflationary pressures through various mitigation strategies. These include supporting suppliers, securing materials via long-term contracts, identifying alternative sources, collaborating with customers on industry-wide issues, and optimizing its supply chain organization. While these factors present ongoing risks, especially for fixed-price contracts, the company's efforts helped to offset some of the potential negative impacts on margins and operational efficiency.
What is the outlook for the company based on its current backlog?
The company's ending backlog of $173.0 billion provides a significant degree of revenue visibility. Lockheed Martin expects to recognize approximately 38% of this backlog over the next 12 months and about 64% within the next 24 months, indicating a stable outlook for near-to-medium term revenue generation.
How did share repurchases and dividends impact the quarter's financial results?
Lockheed Martin actively returned capital to shareholders by repurchasing $750 million of its common stock and paying $796 million in dividends during the quarter. These actions, combined with other factors, contributed to a decrease in the weighted average number of common shares outstanding, which in turn benefited the diluted earnings per share.
06—Continue