- Net sales of $18.1 billion, an
increase of 9% year over year
- Net earnings of $1.6 billion,
or $6.85 per share, inclusive of net
non-operational charges of $79
million ($63 million, or
$0.26 per share, after-tax)
- Cash from operations of $1.9
billion and free cash flow of $1.5
billion
- $1.6 billion of cash
returned to shareholders through dividends and share
repurchases
- 2024 outlook increased for sales, segment operating profit
and earnings per share
BETHESDA, Md., July 23,
2024 /PRNewswire/ -- Lockheed Martin Corporation
[NYSE: LMT] today reported second quarter 2024 net sales of
$18.1 billion, compared to
$16.7 billion in the second quarter
of 2023. Net earnings in the second quarter of 2024 were
$1.6 billion, or $6.85 per share, compared to $1.7 billion, or $6.63 per share, in the second quarter of
2023. Cash from operations was $1.9
billion in the second quarter of 2024, compared to
$1.1 billion in the second quarter of
2023. Free cash flow was $1.5 billion
in the second quarter of 2024, compared to $771 million in the second quarter of 2023.
"Over the past few months, Lockheed Martin's people, systems,
and platforms have again demonstrated their ability to enhance
security in Eastern Europe, the
Red Sea, and the Middle East. From
the PAC-3's critical role in air defense, to the Aegis Combat
System with AI augmentation, to the F-35 with its advanced sensor
and data management capabilities, our company has made major
contributions to allied and partner defense. We continue to
demonstrate the impact of our 21st Century Security®
strategy by harnessing the latest digital technologies to
continuously improve mission effectiveness, strengthening and
scaling the defense production system, and expanding industrial
cooperation among our allies and partners. Consequently, demand for
our defense technology solutions remains robust, with a backlog of
nearly $160 billion, greater than two
times annual revenue," said Lockheed Martin Chairman, President and
CEO Jim Taiclet.
"We delivered strong second quarter financial results, with
year-over-year growth of 9% in sales and 10% in segment operating
profit, and free cash flow generation in excess of $1.5 billion. The year-to-date performance gives
us confidence to raise our 2024 full-year outlook for sales,
segment operating profit, and earnings per share. Operationally,
the F-35 remains a top priority, and we recently delivered the
first Technology Refresh 3-configured aircraft to the customer and
anticipate deliveries for 2024 to meet our expected range of 75-110
F-35s. The TR-3 hardware and software update enables step function
improvement in capability to our airmen, sailors, and marines, as
well as to our partner and allied nations. This foundational
upgrade and the follow-on series of enhancements, known as Block 4,
are critical steps in ensuring the F-35 remains the most advanced
fighter aircraft in the world and the key air vehicle node in the
DoD's joint all domain architecture."
Summary Financial Results
The following table presents the company's summary financial
results.
|
(in millions,
except per share data)
|
|
Quarters
Ended
|
|
Six Months
Ended
|
|
|
|
|
June
30,
2024
|
|
June
25,
2023
|
|
June
30,
2024
|
|
June
25,
2023
|
|
|
Net
sales
|
|
$
18,122
|
|
$
16,693
|
|
$
35,317
|
|
$
31,819
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business segment
operating profit1
|
|
$
2,042
|
|
$
1,855
|
|
$
3,787
|
|
$
3,537
|
|
|
Unallocated
items
|
|
|
|
|
|
|
|
|
|
|
FAS/CAS operating
adjustment
|
|
406
|
|
416
|
|
812
|
|
831
|
|
|
Impairment and
severance charges2
|
|
(87)
|
|
—
|
|
(87)
|
|
—
|
|
|
Intangible asset
amortization expense
|
|
(61)
|
|
(62)
|
|
(122)
|
|
(124)
|
|
|
Other, net
|
|
(152)
|
|
(74)
|
|
(213)
|
|
(72)
|
|
|
Total unallocated
items
|
|
106
|
|
280
|
|
390
|
|
635
|
|
|
Consolidated
operating profit
|
|
$
2,148
|
|
$
2,135
|
|
$
4,177
|
|
$
4,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings3
|
|
$
1,641
|
|
$
1,681
|
|
$
3,186
|
|
$
3,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share3
|
|
$
6.85
|
|
$
6.63
|
|
$
13.24
|
|
$
13.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash from
operations4
|
|
$
1,876
|
|
$
1,100
|
|
$
3,511
|
|
$
2,664
|
|
|
Capital
expenditures
|
|
(370)
|
|
(329)
|
|
(748)
|
|
(623)
|
|
|
Free cash
flow1,4
|
|
$
1,506
|
|
$
771
|
|
$
2,763
|
|
$
2,041
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Business segment
operating profit and free cash flow are non-GAAP measures. See the
"Use of Non-GAAP Financial Measures" section of this news release
for more information.
|
|
2
|
Impairment and
severance charges for the quarter ended June 30, 2024 include
$87 million ($69 million, or $0.29 per share, after-tax)
trademark and fixed asset impairments as well as severance costs at
the company's RMS business segment.
|
|
3
|
Net earnings for the
quarter ended June 30, 2024 include $79 million ($63 million,
or $0.26 per share, after-tax) of net non-operational charges,
including Impairment and severance charges described above. See
"Adjusted earnings before income taxes, net earnings and diluted
EPS" table for further details.
|
|
4
|
See the "Cash Flows and
Capital Deployment Activities" section of this news release for
more information.
|
|
|
|
|
2024 Financial Outlook
The following table and other sections of this news release
contain forward-looking statements, which are based on the
company's current expectations. Actual results may differ
materially from those projected. It is the company's practice not
to incorporate adjustments into its financial outlook for proposed
or potential acquisitions, divestitures, ventures, pension risk
transfer transactions, financing transactions, changes in law, or
new accounting standards until such items have been consummated,
enacted or adopted. For additional factors that may impact the
company's actual results, refer to the "Forward-Looking Statements"
section in this news release.
|
(in millions,
except per share data)
|
|
Current
Update
|
|
April
2024
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$70,500 -
$71,500
|
|
$68,500 -
$70,000
|
|
|
|
|
|
|
|
|
|
Business segment
operating profit1
|
|
$7,350 -
$7,500
|
|
$7,175 -
$7,375
|
|
|
|
|
|
|
|
|
|
Total FAS/CAS pension
adjustment
|
|
~$1,685
|
|
~$1,685
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share2
|
|
$26.10 -
$26.60
|
|
$25.65 -
$26.35
|
|
|
|
|
|
|
|
|
|
Cash from
operations
|
|
$7,750 -
$8,050
|
|
$7,750 -
$8,050
|
|
|
Capital
expenditures
|
|
~$1,750
|
|
~$1,750
|
|
|
Free cash
flow1
|
|
$6,000 -
$6,300
|
|
$6,000 -
$6,300
|
|
|
|
|
|
|
|
|
1
|
Business segment
operating profit and free cash flow are non-GAAP measures. See the
"Use of Non-GAAP Financial Measures" section of this news release
for more information.
|
|
2
|
Although the company
typically does not update its outlook for proposed changes in law,
the above includes the effect of IRS Notice 2023-63 confirming that
certain expenditures incurred in the performance of cost-type
contracts are not subject to capitalization for tax purposes. The
company believes incorporating the clarification from the Notice
more accurately reflects its expectations because the Notice
describes the tax treatment of certain expenditures in accordance
with the company's analysis of the Internal Revenue
Code.
|
|
|
|
|
Cash Flows and Capital Deployment Activities
The increase in operating and free cash flows in the second
quarter of 2024 compared to the same period in 2023 was primarily
due to improvements in working capital (defined as receivables,
contract assets, and inventories less accounts payable and contract
liabilities) and the timing of federal tax payments. Improvements
in working capital were driven by volume and timing of milestone
payments impacting both contract liabilities and contract assets on
classified programs at the company's Space business segment,
decreases in inventory due to deliveries of S-70 helicopters at
Sikorsky at the company's RMS business segment, and production and
billing cycle timing impacting receivables (primarily F-35 at
Aeronautics and Integrated Air and Missile Defense at MFC,
partially offset by Integrated warfare systems and sensors at RMS).
These improvements were partially offset by the timing of cash
payments related to accounts payable (primarily Aeronautics).
The company's cash activities in the second quarter of 2024,
included the following:
- paying cash dividends of $752
million;
- paying $850 million to repurchase
1.9 million shares; and
- making a long-term debt scheduled repayment of $168 million.
Segment Results
The company operates in four business segments organized based
on the nature of products and services offered: Aeronautics,
Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS)
and Space. The following table presents summary operating results
of the company's business segments and reconciles these amounts to
the company's consolidated financial results.
|
(in millions)
|
|
Quarters
Ended
|
|
Six Months
Ended
|
|
|
|
|
June
30,
2024
|
|
June
25,
2023
|
|
June
30,
2024
|
|
June
25,
2023
|
|
|
Net
sales
|
|
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
$
7,277
|
|
$
6,875
|
|
$
14,122
|
|
$
13,144
|
|
|
Missiles and Fire
Control
|
|
3,102
|
|
2,755
|
|
6,095
|
|
5,143
|
|
|
Rotary and Mission
Systems
|
|
4,548
|
|
3,897
|
|
8,636
|
|
7,407
|
|
|
Space
|
|
3,195
|
|
3,166
|
|
6,464
|
|
6,125
|
|
|
Total net
sales
|
|
$
18,122
|
|
$
16,693
|
|
$
35,317
|
|
$
31,819
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
$
751
|
|
$
718
|
|
$
1,430
|
|
$
1,393
|
|
|
Missiles and Fire
Control
|
|
450
|
|
371
|
|
761
|
|
748
|
|
|
Rotary and Mission
Systems
|
|
495
|
|
454
|
|
925
|
|
804
|
|
|
Space
|
|
346
|
|
312
|
|
671
|
|
592
|
|
|
Total business
segment operating
profit
|
|
2,042
|
|
1,855
|
|
3,787
|
|
3,537
|
|
|
Unallocated
items
|
|
|
|
|
|
|
|
|
|
|
FAS/CAS operating
adjustment
|
|
406
|
|
416
|
|
812
|
|
831
|
|
|
Impairment and
severance charges
|
|
(87)
|
|
—
|
|
(87)
|
|
—
|
|
|
Intangible asset
amortization
expense
|
|
(61)
|
|
(62)
|
|
(122)
|
|
(124)
|
|
|
Other, net
|
|
(152)
|
|
(74)
|
|
(213)
|
|
(72)
|
|
|
Total unallocated
items
|
|
106
|
|
280
|
|
390
|
|
635
|
|
|
Total consolidated
operating profit
|
|
$
2,148
|
|
$
2,135
|
|
$
4,177
|
|
$
4,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For information on factors impacting comparability of the
company's segment sales, operating profit and operating margins,
see "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in the company's Annual Report on Form
10-K for the year ended Dec. 31, 2023.
The company's consolidated net favorable profit booking rate
adjustments represented approximately 21% and 20% of total segment
operating profit in the quarters ended June 30, 2024 and
June 25, 2023. During the quarter ended June 25, 2023, we recognized a favorable profit
adjustment of $65 million on an
international surveillance and control program due to the positive
resolution of a contractual matter, and an unfavorable profit
adjustment of $100 million on the
Canadian Maritime Helicopter Program (CMHP) as a result of
increased costs and lower than planned revenues.
Aeronautics
|
(in millions)
|
|
Quarters
Ended
|
|
Six Months
Ended
|
|
|
|
|
June
30,
2024
|
|
June
25,
2023
|
|
June
30,
2024
|
|
June
25,
2023
|
|
|
Net
sales
|
|
$ 7,277
|
|
$ 6,875
|
|
$ 14,122
|
|
$ 13,144
|
|
|
Operating
profit
|
|
751
|
|
718
|
|
1,430
|
|
1,393
|
|
|
Operating
margin
|
|
10.3 %
|
|
10.4 %
|
|
10.1 %
|
|
10.6 %
|
|
Aeronautics' net sales in the second quarter of 2024 increased
$402 million, or 6%, compared to the
same period in 2023. The increase was primarily attributable to
higher net sales of $335 million on
the F-35 program due to higher volume on sustainment,
development and production contracts; and $105 million on the F-16 program due to the ramp
up on production.
Aeronautics' operating profit in the second quarter of 2024
increased $33 million, or 5%,
compared to the same period in 2023. The increase in operating
profit was attributable to $35
million from higher volume and program ramp up described
above and $25 million from favorable
contract mix across the portfolio, partially offset by $25 million of lower profit booking rate
adjustments. The decrease in profit booking rate adjustments was
due to a $45 million unfavorable
profit adjustment on a classified program because of higher than
anticipated costs to maintain program objectives, partially offset
by higher net favorable profit adjustments across the
portfolio.
Missiles and Fire Control
|
(in millions)
|
|
Quarters
Ended
|
|
Six Months
Ended
|
|
|
|
|
June
30,
2024
|
|
June
25,
2023
|
|
June
30,
2024
|
|
June
25,
2023
|
|
|
Net
sales
|
|
$
3,102
|
|
$
2,755
|
|
$
6,095
|
|
$
5,143
|
|
|
Operating
profit
|
|
450
|
|
371
|
|
761
|
|
748
|
|
|
Operating
margin
|
|
14.5 %
|
|
13.5 %
|
|
12.5 %
|
|
14.5 %
|
|
MFC's net sales in the second quarter of 2024 increased
$347 million, or 13%, compared
to the same period in 2023. The increase was primarily attributable
to higher net sales of $320 million
for tactical and strike missile programs due to production ramp up
on Guided Multiple Launch Rocket Systems (GMLRS) and Long Range
Anti-Ship Missile (LRASM) programs.
MFC's operating profit in the second quarter of 2024 increased
$79 million, or 21%, compared to the
same period in 2023, due to $80
million of higher profit booking rate adjustments which
primarily reflects higher favorable profit booking rate adjustments
on PAC-3 and Apache due to better than anticipated cost
performance. Additionally, operating profit increased $30 million from production ramp up described
above, offset by $30 million decrease
from contract mix.
Rotary and Mission Systems
|
(in millions)
|
|
Quarters
Ended
|
|
Six Months
Ended
|
|
|
|
|
June
30,
2024
|
|
June
25,
2023
|
|
June
30,
2024
|
|
June
25,
2023
|
|
|
Net
sales
|
|
$ 4,548
|
|
$ 3,897
|
|
$
8,636
|
|
$
7,407
|
|
|
Operating
profit
|
|
495
|
|
454
|
|
925
|
|
804
|
|
|
Operating
margin
|
|
10.9 %
|
|
11.6 %
|
|
10.7 %
|
|
10.9 %
|
|
RMS' net sales in the second quarter of 2024 increased
$651 million, or 17%, compared to the
same period in 2023. The increase was primarily attributable to
higher net sales of $420 million on
integrated warfare systems and sensors (IWSS) programs due to
higher volume on radar programs and the Canadian Surface Combatant
(CSC) program, and new program ramp up within the laser systems
portfolio; and $160 million for
Sikorsky helicopter programs due to higher production volume on
Black Hawk and CH-53K programs.
RMS' operating profit in the second quarter of 2024 increased
$41 million, or 9%, compared to the
same period in 2023. The increase in operating profit was
attributable to $70 million from
higher volume described above, partially offset by $20 million of lower profit booking rate
adjustments. The decrease in profit booking rate adjustments was
due to unfavorable profit adjustments on Seahawk and Black Hawk
production programs as a result of increased costs, partially
offset by the net impact in the second quarter of 2023 of both a
$65 million favorable profit
adjustment on an international surveillance and control program and
a $100 million unfavorable profit
adjustment on the Canadian Maritime Helicopter Program (CMHP) that
did not recur in the second quarter of 2024.
Space
|
(in millions)
|
|
Quarters
Ended
|
|
Six Months
Ended
|
|
|
|
|
June
30,
2024
|
|
June
25,
2023
|
|
June
30,
2024
|
|
June
25,
2023
|
|
|
Net
sales
|
|
$ 3,195
|
|
$ 3,166
|
|
$
6,464
|
|
$
6,125
|
|
|
Operating
profit
|
|
346
|
|
312
|
|
671
|
|
592
|
|
|
Operating
margin
|
|
10.8 %
|
|
9.9 %
|
|
10.4 %
|
|
9.7 %
|
|
Space's net sales in the second quarter of 2024 increased
$29 million, or 1%, compared to the
same period in 2023. The increase was primarily attributable to
higher net sales of $110 million for
strategic and missile defense programs due to higher volume on the
hypersonics and Fleet Ballistic Missile (FBM) programs; partially
offset by lower net sales of $50
million for national security space due to lower volume on
classified programs and $45 million
for commercial civil space due to lower volume on the Orion
program.
Space's operating profit in the second quarter of 2024 increased
$34 million, or 11%, compared to the
same period in 2023. The increase in operating profit was
attributable to $20 million from
favorable contract mix across the portfolio and $20 million of higher profit booking rate
adjustments. The increase in profit booking rate adjustments was
due to higher favorable profit adjustments on the FBM program.
Total equity earnings/(losses) (primarily ULA) represented
approximately $10 million, or 3% of
Space's operating profit in the second quarter of 2024, compared to
approximately $20 million, or 6% for
the same period in 2023.
Income Taxes
The company's effective income tax rate was 15.8% and 16.2% for
the quarters ended June 30, 2024 and June 25, 2023. The
rates for both periods benefited from research and development tax
credits, tax deductions for foreign derived intangible income and
dividends paid to the company's defined contribution plans
with an employee stock ownership plan feature.
Use of Non-GAAP Financial Measures
This news release contains the following non-generally accepted
accounting principles (non-GAAP) financial measures (as defined by
U.S. Securities and Exchange Commission (SEC) Regulation G). While
management believes that these non-GAAP financial measures may be
useful in evaluating the financial performance of the company, this
information should be considered supplemental to, and not a
substitute for, financial information prepared in accordance with
GAAP. In addition, the company's definitions for non-GAAP financial
measures may differ from similarly titled measures used by other
companies or analysts.
Business segment operating profit
Business segment operating profit represents operating profit
from the company's business segments before unallocated income and
expense. This measure is used by the company's senior management in
evaluating the performance of its business segments and is a
performance goal in the company's annual incentive plan. Business
segment operating margin is calculated by dividing business segment
operating profit by sales. The table below reconciles the non-GAAP
measure business segment operating profit with the most directly
comparable GAAP financial measure, consolidated operating
profit.
|
(in
millions)
|
|
Current
Update
|
|
April
2024
|
|
|
Business segment
operating profit (non-GAAP)
|
|
$7,350 -
$7,500
|
|
$7,175 -
$7,375
|
|
|
FAS/CAS operating
adjustment1
|
|
~1,625
|
|
~1,625
|
|
|
Intangible asset
amortization expense
|
|
~(245)
|
|
~(245)
|
|
|
Other,
net2
|
|
~(530)
|
|
~(400)
|
|
|
Consolidated
operating profit (GAAP)
|
|
~$8,200 -
8,350
|
|
~$8,155 -
$8,355
|
|
|
|
|
|
|
|
|
1
|
Reflects the amount by
which expected total CAS pension cost of $1.7 billion, exceeds the
expected FAS pension service cost and excludes expected non-service
FAS pension income. Refer to the supplemental table "Selected
Financial Data" included in this news release for a detail of the
FAS/CAS operating adjustment.
|
|
2
|
Includes impairment and
severance charges of $87 million ($69 million, or $0.29
per share, after-tax) for trademark and fixed asset impairments as
well as severance costs recorded during the quarter ended June 30,
2024.
|
|
|
|
|
Free cash flow
Free cash flow is cash from operations less capital
expenditures. The company's capital expenditures are comprised of
equipment and facilities infrastructure and information technology
(inclusive of costs for the development or purchase of internal-use
software that are capitalized). The company uses free cash flow to
evaluate its business performance and overall liquidity and it is a
performance goal in the company's annual and long-term incentive
plans. The company believes free cash flow is a useful measure for
investors because it represents the amount of cash generated from
operations after reinvesting in the business and that may be
available to return to stockholders and creditors (through
dividends, stock repurchases and debt repayments) or available to
fund acquisitions or other investments. The entire free cash flow
amount is not necessarily available for discretionary expenditures,
however, because it does not account for certain mandatory
expenditures, such as the repayment of maturing debt and future
pension contributions.
Adjusted earnings before income taxes; adjusted net earnings
and adjusted diluted EPS
Earnings before income taxes, net earnings and diluted earnings
per share (EPS) were impacted by certain non-operational items for
all periods. Management believes the presentation of these measures
adjusted for the impacts of these non-operational items is useful
to investors in understanding the company's underlying business
performance and comparing performance from period to period. The
tax effects related to each adjustment that impacted earnings
before income taxes are based on a blended tax rate that combines
the federal statutory rate of 21% plus an estimated state tax
rate.
The table below shows the impact to earnings before income
taxes, net earnings and diluted EPS for certain non-operational
items:
|
(in millions,
except per share data)
|
|
Quarters
Ended
|
|
|
|
|
June
30,
2024
|
|
June
25,
2023
|
|
|
|
|
Earnings Before
Income Taxes
|
Net
Earnings
|
Diluted
EPS
|
|
Earnings Before
Income Taxes
|
Net
Earnings
|
Diluted
EPS
|
|
|
As Reported
(GAAP)
|
|
$ 1,948
|
$ 1,641
|
$
6.85
|
|
$ 2,006
|
$ 1,681
|
$ 6.63
|
|
|
Impairment and
severance charges
|
|
87
|
69
|
0.29
|
|
—
|
—
|
—
|
|
|
Mark-to-market
investment (gains) losses
|
|
(8)
|
(6)
|
(0.03)
|
|
28
|
21
|
0.08
|
|
|
Debt transactions
costs
|
|
—
|
—
|
—
|
|
6
|
5
|
0.02
|
|
|
Total
Adjustments
|
|
79
|
63
|
0.26
|
|
34
|
26
|
0.10
|
|
|
As Adjusted
(Non-GAAP)
|
|
$ 2,027
|
$ 1,704
|
$
7.11
|
|
$ 2,040
|
$ 1,707
|
$ 6.73
|
|
|
|
|
|
|
|
|
|
|
|
Webcast and Conference Call Information
Lockheed Martin Corporation will webcast live the earnings
results conference call (listen-only mode) on Tuesday, July 23, 2024, at 11:00 a.m. ET on the Lockheed Martin Investor
Relations website at www.lockheedmartin.com/investor. The
accompanying presentation slides and relevant financial charts are
also available at www.lockheedmartin.com/investor.
For additional information, visit the company's website:
www.lockheedmartin.com.
About Lockheed Martin
Lockheed Martin is a global defense technology company driving
innovation and advancing scientific discovery. Our all-domain
mission solutions and 21st Century Security® vision accelerate the
delivery of transformative technologies to ensure those we serve
always stay ahead of ready. More information at
www.lockheedmartin.com.
Forward-Looking Statements
This news release contains statements that, to the extent they
are not recitations of historical fact, constitute forward-looking
statements within the meaning of the federal securities laws, and
are based on Lockheed Martin's current expectations and
assumptions. The words "believe," "estimate," "anticipate,"
"project," "intend," "expect," "plan," "outlook," "scheduled,"
"forecast" and similar expressions are intended to identify
forward-looking statements. These statements are not guarantees of
future performance and are subject to risks and uncertainties.
Actual results may differ materially due to factors such as:
- the company's reliance on contracts with the U.S. Government,
which are dependent on U.S. Government funding and can be
terminated for convenience, and the company's ability to negotiate
favorable contract terms;
- budget uncertainty, the risk of future budget cuts, the impact
of continuing resolution funding mechanisms and the debt ceiling
and the potential for government shutdowns and changing funding and
acquisition priorities;
- risks related to the development, production, sustainment,
performance, schedule, cost and requirements of complex and
technologically advanced programs, including the F-35 program;
- planned production rates and orders for significant programs,
compliance with stringent performance and reliability standards,
and materials availability, including government furnished
equipment;
- the timing of contract awards or delays in contract
definitization as well as the timing and customer acceptance of
product deliveries and performance milestones;
- the company's ability to recover costs under U.S. Government
contracts and the mix of fixed-price and cost-reimbursable
contracts;
- customer procurement policies that shift risk to contractors,
including competitively bid programs with fixed-price development
work or follow-on production options or other financial risks; and
the impact of investments, cost overruns or other cost pressures
and performance issues on fixed price contracts;
- changes in procurement and other regulations and policies
affecting the company's industry, export of its products, cost
allowability or recovery, preferred contract type, and performance
and progress payments policy;
- performance and financial viability of key suppliers,
teammates, joint ventures (including United Launch Alliance), joint
venture partners, subcontractors and customers;
- economic, industry, business and political conditions including
their effects on governmental policy;
- the impact of inflation and other cost pressures;
- the impact of pandemics and epidemics on the company's business
and financial results, including supply chain disruptions and
delays, employee absences, and program delays;
- government actions that prevent the sale or delivery of the
company's products (such as delays in approvals for exports
requiring Congressional notification);
- trade policies or sanctions (including Chinese sanctions on the
company or its suppliers, teammates or partners, U.S. Government
sanctions on Türkish entities and persons, indirect effects of
sanctions on Russia to the
company's supply chain);
- the company's success expanding into and doing business in
adjacent markets and internationally and the risks posed by
international sales;
- changes in foreign national priorities and foreign government
budgets and planned orders, including potential effects from
fluctuations in currency exchange rates;
- the competitive environment for the company's products and
services, including competition from startups and non-traditional
defense contractors;
- the company's ability to develop and commercialize new
technologies and products, including emerging digital and network
technologies and capabilities;
- the company's ability to benefit fully from or adequately
protect its intellectual property rights;
- the company's ability to attract and retain a highly skilled
workforce, the impact of work stoppages or other labor
disruptions;
- cyber or other security threats or other disruptions faced by
the company or its suppliers;
- the company's ability to implement and continue, and the timing
and impact of, capitalization changes such as share repurchases,
dividend payments and financing transactions;
- the accuracy of the company's estimates and projections;
- changes in pension plan assumptions and actual returns on
pension assets; cash funding requirements and pension risk
transfers and associated settlement charges;
- realizing the anticipated benefits of acquisitions or
divestitures, investments, joint ventures, teaming arrangements or
internal reorganizations, and market volatility affecting the fair
value of investments that are marked to market;
- the company's efforts to increase the efficiency of its
operations and improve the affordability of its products and
services, including through digital transformation and cost
reduction initiatives;
- the risk of an impairment of the company's assets, including
the potential impairment of goodwill and intangibles;
- the availability and adequacy of the company's insurance and
indemnities;
- impacts of climate change and compliance with laws,
regulations, policies, and customer requirements in response to
climate change concerns;
- changes in accounting, U.S. or foreign tax, export or other
laws, regulations, and policies and their interpretation or
application, and changes in the amount or reevaluation of uncertain
tax positions; and
- the outcome of legal proceedings, bid protests, environmental
remediation efforts, audits, government investigations or
government allegations that the company has failed to comply with
law, other contingencies and U.S. Government identification of
deficiencies in its business systems.
These are only some of the factors that may affect the
forward-looking statements contained in this news release. For a
discussion identifying additional important factors that could
cause actual results to differ materially from those anticipated in
the forward-looking statements, see the company's filings with the
U.S. Securities and Exchange Commission including, but not limited
to, "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Risk Factors" in the company's most
recent Annual Report on Form 10-K and subsequent quarterly reports
on Form 10-Q. The company's filings may be accessed through the
Investor Relations page of its website,
www.lockheedmartin.com/investor, or through the website maintained
by the SEC at www.sec.gov.
The company's actual financial results likely will be different
from those projected due to the inherent nature of projections.
Given these uncertainties, forward-looking statements should not be
relied on in making investment decisions. The forward-looking
statements contained in this news release speak only as of the date
of its filing. Except where required by applicable law, the company
expressly disclaims a duty to provide updates to forward-looking
statements after the date of this news release to reflect
subsequent events, changed circumstances, changes in expectations,
or the estimates and assumptions associated with them. The
forward-looking statements in this news release are intended to be
subject to the safe harbor protection provided by the federal
securities laws.
Lockheed Martin
Corporation
Consolidated
Statements of Earnings1
(unaudited;
in millions, except per share data)
|
|
|
|
|
|
Quarters
Ended
|
|
Six Months
Ended
|
|
|
|
June 30,
2024
|
|
June 25,
2023
|
|
June 30,
2024
|
|
June 25,
2023
|
|
Net
sales
|
|
$
18,122
|
|
$
16,693
|
|
$
35,317
|
|
$
31,819
|
|
Cost of sales
2
|
|
(15,992)
|
|
(14,603)
|
|
(31,194)
|
|
(27,683)
|
|
Gross profit
|
|
2,130
|
|
2,090
|
|
4,123
|
|
4,136
|
|
Other income,
net
|
|
18
|
|
45
|
|
54
|
|
36
|
|
Operating
profit
|
|
2,148
|
|
2,135
|
|
4,177
|
|
4,172
|
|
Interest
expense
|
|
(261)
|
|
(223)
|
|
(516)
|
|
(425)
|
|
Non-service FAS pension
income
|
|
15
|
|
111
|
|
31
|
|
221
|
|
Other non-operating
income (expense), net
|
|
46
|
|
(17)
|
|
91
|
|
32
|
|
Earnings before income
taxes
|
|
1,948
|
|
2,006
|
|
3,783
|
|
4,000
|
|
Income tax
expense
|
|
(307)
|
|
(325)
|
|
(597)
|
|
(630)
|
|
Net
earnings
|
|
$
1,641
|
|
$
1,681
|
|
$
3,186
|
|
$
3,370
|
|
Effective tax
rate
|
|
15.8 %
|
|
16.2 %
|
|
15.8 %
|
|
15.8 %
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
6.87
|
|
$
6.65
|
|
$
13.29
|
|
$
13.28
|
|
Diluted
|
|
$
6.85
|
|
$
6.63
|
|
$
13.24
|
|
$
13.24
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
238.9
|
|
252.8
|
|
239.8
|
|
253.7
|
|
Diluted
|
|
239.6
|
|
253.6
|
|
240.6
|
|
254.6
|
|
|
|
|
|
|
|
|
|
|
|
Common shares reported
in stockholders'
equity at end of
period
|
|
|
|
|
|
237
|
|
251
|
|
|
|
|
|
|
|
|
|
|
1
|
The company closes its
books and records on the last Sunday of the calendar quarter to
align its financial closing with its business processes, which was
on June 30, for the second quarter of 2024 and June 25, for the
second quarter of 2023. The consolidated financial statements and
tables of financial information included herein are labeled based
on that convention. This practice only affects interim periods, as
the company's fiscal year ends on Dec. 31.
|
2
|
In the second quarter
of 2024, the company recognized trademark and fixed asset
impairments as well as severance costs.
|
|
|
Lockheed Martin
Corporation
Business Segment
Summary Operating Results
(unaudited;
in millions)
|
|
|
|
|
Quarters
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
June 30,
2024
|
|
June 25,
2023
|
|
%
Change
|
|
June 30,
2024
|
|
June 25,
2023
|
|
%
Change
|
|
Net
sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
$
7,277
|
|
$
6,875
|
|
6 %
|
|
$ 14,122
|
|
$ 13,144
|
|
7 %
|
|
Missiles and Fire
Control
|
|
3,102
|
|
2,755
|
|
13 %
|
|
6,095
|
|
5,143
|
|
19 %
|
|
Rotary and Mission
Systems
|
|
4,548
|
|
3,897
|
|
17 %
|
|
8,636
|
|
7,407
|
|
17 %
|
|
Space
|
|
3,195
|
|
3,166
|
|
1 %
|
|
6,464
|
|
6,125
|
|
6 %
|
|
Total net
sales
|
|
$
18,122
|
|
$ 16,693
|
|
9 %
|
|
$ 35,317
|
|
$ 31,819
|
|
11 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
$
751
|
|
$
718
|
|
5 %
|
|
$
1,430
|
|
$
1,393
|
|
3 %
|
|
Missiles and Fire
Control
|
|
450
|
|
371
|
|
21 %
|
|
761
|
|
748
|
|
2 %
|
|
Rotary and Mission
Systems
|
|
495
|
|
454
|
|
9 %
|
|
925
|
|
804
|
|
15 %
|
|
Space
|
|
346
|
|
312
|
|
11 %
|
|
671
|
|
592
|
|
13 %
|
|
Total business
segment operating
profit
|
|
2,042
|
|
1,855
|
|
10 %
|
|
3,787
|
|
3,537
|
|
7 %
|
|
Unallocated
items
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FAS/CAS operating
adjustment
|
|
406
|
|
416
|
|
|
|
812
|
|
831
|
|
|
|
Impairment and
severance charges
|
|
(87)
|
|
—
|
|
|
|
(87)
|
|
—
|
|
|
|
Intangible asset
amortization expense
|
|
(61)
|
|
(62)
|
|
|
|
(122)
|
|
(124)
|
|
|
|
Other, net
|
|
(152)
|
|
(74)
|
|
|
|
(213)
|
|
(72)
|
|
|
|
Total unallocated
items
|
|
106
|
|
280
|
|
(62 %)
|
|
390
|
|
635
|
|
(39 %)
|
|
Total consolidated
operating
profit
|
|
$
2,148
|
|
$
2,135
|
|
1 %
|
|
$
4,177
|
|
$
4,172
|
|
— %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aeronautics
|
|
10.3 %
|
|
10.4 %
|
|
|
|
10.1 %
|
|
10.6 %
|
|
|
|
Missiles and Fire
Control
|
|
14.5 %
|
|
13.5 %
|
|
|
|
12.5 %
|
|
14.5 %
|
|
|
|
Rotary and Mission
Systems
|
|
10.9 %
|
|
11.6 %
|
|
|
|
10.7 %
|
|
10.9 %
|
|
|
|
Space
|
|
10.8 %
|
|
9.9 %
|
|
|
|
10.4 %
|
|
9.7 %
|
|
|
|
Total business
segment operating
margin
|
|
11.3 %
|
|
11.1 %
|
|
|
|
10.7 %
|
|
11.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total consolidated
operating
margin
|
|
11.9 %
|
|
12.8 %
|
|
|
|
11.8 %
|
|
13.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lockheed Martin
Corporation
Selected Financial
Data
(unaudited; in
millions)
|
|
|
|
|
2024
Outlook
|
|
2023
Actual
|
|
Total FAS income CAS
cost
|
|
|
|
|
|
FAS pension
income
|
|
$
—
|
|
$
378
|
|
Less: CAS pension
cost
|
|
1,685
|
|
1,725
|
|
Total FAS/CAS pension
adjustment
|
|
$
1,685
|
|
$
2,103
|
|
|
|
|
|
|
|
Service and
non-service cost reconciliation
|
|
|
|
|
|
FAS pension service
cost
|
|
$
(60)
|
|
$
(65)
|
|
Less: CAS pension
cost
|
|
1,685
|
|
1,725
|
|
Total FAS/CAS pension
operating adjustment
|
|
1,625
|
|
1,660
|
|
Non-service FAS pension
income
|
|
60
|
|
443
|
|
Total FAS/CAS pension
adjustment
|
|
$
1,685
|
|
$
2,103
|
Lockheed Martin
Corporation
Consolidated Balance
Sheets
(unaudited,
in millions, except par value)
|
|
|
|
|
June 30,
2024
|
|
Dec.
31,
2023
|
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
2,523
|
|
$
1,442
|
|
Receivables,
net
|
|
2,930
|
|
2,132
|
|
Contract
assets
|
|
13,907
|
|
13,183
|
|
Inventories
|
|
3,097
|
|
3,132
|
|
Other current
assets
|
|
510
|
|
632
|
|
Total current
assets
|
|
22,967
|
|
20,521
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
8,394
|
|
8,370
|
|
Goodwill
|
|
10,787
|
|
10,799
|
|
Intangible assets,
net
|
|
2,040
|
|
2,212
|
|
Deferred income
taxes
|
|
3,080
|
|
2,953
|
|
Other noncurrent
assets
|
|
7,808
|
|
7,601
|
|
Total
assets
|
|
$
55,076
|
|
$
52,456
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
|
$
3,282
|
|
$
2,312
|
|
Salaries, benefits and
payroll taxes
|
|
2,871
|
|
3,133
|
|
Contract
liabilities
|
|
9,181
|
|
9,190
|
|
Current maturities of
long-term debt
|
|
142
|
|
168
|
|
Other current
liabilities
|
|
3,017
|
|
2,134
|
|
Total current
liabilities
|
|
18,493
|
|
16,937
|
|
|
|
|
|
|
|
Long-term debt,
net
|
|
19,115
|
|
17,291
|
|
Accrued pension
liabilities
|
|
6,105
|
|
6,162
|
|
Other noncurrent
liabilities
|
|
5,188
|
|
5,231
|
|
Total
liabilities
|
|
48,901
|
|
45,621
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
Common stock, $1 par
value per share
|
|
237
|
|
240
|
|
Additional paid-in
capital
|
|
—
|
|
—
|
|
Retained
earnings
|
|
14,707
|
|
15,398
|
|
Accumulated other
comprehensive loss
|
|
(8,769)
|
|
(8,803)
|
|
Total stockholders'
equity
|
|
6,175
|
|
6,835
|
|
Total liabilities and
equity
|
|
$
55,076
|
|
$
52,456
|
|
|
|
|
|
|
Lockheed Martin
Corporation
Consolidated
Statements of Cash Flows
(unaudited;
in millions)
|
|
|
|
Six Months
Ended
|
|
|
June 30,
2024
|
|
June 25,
2023
|
Operating
activities
|
|
|
|
|
Net earnings
|
|
$
3,186
|
|
$
3,370
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities
|
|
|
|
|
Depreciation and
amortization
|
|
710
|
|
659
|
Stock-based
compensation
|
|
154
|
|
146
|
Deferred income
taxes
|
|
(145)
|
|
(234)
|
Impairment and
severance charges
|
|
87
|
|
—
|
Changes in assets and
liabilities
|
|
|
|
|
Receivables,
net
|
|
(798)
|
|
(922)
|
Contract
assets
|
|
(724)
|
|
(690)
|
Inventories
|
|
35
|
|
(410)
|
Accounts
payable
|
|
1,052
|
|
1,397
|
Contract
liabilities
|
|
(9)
|
|
(304)
|
Income
taxes
|
|
21
|
|
(46)
|
Qualified defined
benefit pension plans
|
|
(1)
|
|
(189)
|
Other, net
|
|
(57)
|
|
(113)
|
Net cash provided
by operating activities
|
|
3,511
|
|
2,664
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
Capital
expenditures
|
|
(748)
|
|
(623)
|
Other, net
|
|
4
|
|
30
|
Net cash used for
investing activities
|
|
(744)
|
|
(593)
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
Issuance of long-term
debt, net of related costs
|
|
1,980
|
|
1,975
|
Repayments of long-term
debt
|
|
(168)
|
|
—
|
Repurchases of common
stock
|
|
(1,850)
|
|
(1,250)
|
Dividends
paid
|
|
(1,532)
|
|
(1,542)
|
Other, net
|
|
(116)
|
|
(128)
|
Net cash used for
financing activities
|
|
(1,686)
|
|
(945)
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
|
1,081
|
|
1,126
|
Cash and cash
equivalents at beginning of period
|
|
1,442
|
|
2,547
|
Cash and cash
equivalents at end of period
|
|
$
2,523
|
|
$
3,673
|
|
|
|
|
|
Lockheed Martin
Corporation
Other Financial and
Operating Information
(unaudited;
in millions, except for aircraft deliveries and
weeks)
|
|
|
Backlog
|
|
June
30,
2024
|
|
Dec.
31,
2023
|
|
Aeronautics
|
|
$
53,032
|
|
$
60,156
|
|
Missiles and Fire
Control
|
|
34,831
|
|
32,229
|
|
Rotary and Mission
Systems
|
|
37,366
|
|
37,726
|
|
Space
|
|
33,113
|
|
30,456
|
|
Total
backlog
|
|
$
158,342
|
|
$
160,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters
Ended
|
|
Six Months
Ended
|
|
Aircraft
Deliveries
|
|
June 30,
2024
|
|
June 25,
2023
|
|
June 30,
2024
|
|
June 25,
2023
|
|
F-35
|
|
—
|
|
45
|
|
—
|
|
50
|
|
F-16
|
|
4
|
|
—
|
|
7
|
|
1
|
|
C-130J
|
|
5
|
|
4
|
|
9
|
|
6
|
|
Government helicopter
programs
|
|
10
|
|
11
|
|
23
|
|
21
|
|
Commercial helicopter
programs
|
|
—
|
|
—
|
|
—
|
|
1
|
|
International military
helicopter programs
|
|
5
|
|
—
|
|
5
|
|
—
|
|
Number of Weeks in
Reporting Period1
|
|
2024
|
2023
|
|
First
quarter
|
|
13
|
12
|
|
Second
quarter
|
|
13
|
13
|
|
Third
quarter
|
|
13
|
13
|
|
Fourth
quarter
|
|
13
|
14
|
|
|
|
|
|
1
|
Calendar quarters are
typically comprised of 13 weeks. However, the company closes its
books and records on the last Sunday of each month, except for the
month of Dec., as its fiscal year ends on Dec. 31. As a result, the
number of weeks in a reporting quarter may vary slightly during the
year and for comparable prior year periods.
|
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SOURCE Lockheed Martin Corporation