10-QPeriod: Q1 FY2025

LOCKHEED MARTIN CORP Quarterly Report for Q1 Ended Mar 30, 2025

Filed April 22, 2025For Securities:LMT

Summary

Lockheed Martin Corporation (LMT) reported solid financial results for the quarter ended March 30, 2025, with total sales increasing to $17.96 billion, 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 billion, 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 billion 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 million in stock and paying $796 million in dividends, underscoring its financial strength and confidence in its future prospects.

Financial Highlights

46 data points
Beta

Revenue

$17.96B

12.9% Gross Margin

Net Income

$1.71B

9.5% Net Margin

EPS (Diluted)

$7.28

Total Assets

$56.67B

Cash & Equivalents

$1.80B

Free Cash Flow

$1.41B

Financial Statements
Beta
Revenue$17.96B
Cost of Revenue$15.64B
Gross Profit$2.32B
Operating Income$2.37B
Net Income$1.71B
EPS (Basic)$7.30
EPS (Diluted)$7.28
Shares Outstanding (Basic)234.40M
Shares Outstanding (Diluted)235.30M

Key Highlights

  • 1Total sales for the quarter increased by 4.5% year-over-year to $17.96 billion, driven primarily by product sales growth.
  • 2Net earnings rose by 10.8% to $1.71 billion, with diluted EPS increasing to $7.28 from $6.39 in the prior year.
  • 3Operating profit for the consolidated business segments grew to $2.085 billion, up from $1.745 billion in Q1 2024.
  • 4The Missiles and Fire Control (MFC) segment showed a notable 13% increase in sales and a 50% surge in operating profit.
  • 5Lockheed Martin maintained a strong backlog of $173.0 billion, with approximately 38% expected to be recognized in revenue over the next 12 months.
  • 6The company returned $1.55 billion to shareholders through dividends ($796 million) and share repurchases ($750 million) during the quarter.
  • 7Free 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.

Frequently Asked Questions

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.

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.

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.

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.