Lockheed Martin Reports Second Quarter 2024 Financial Results

Rhea-AI Summary

Lockheed Martin (NYSE: LMT) reported strong Q2 2024 financial results, with net sales of $18.1 billion, up 9% year-over-year, and net earnings of $1.6 billion, or $6.85 per share. The company generated $1.9 billion in cash from operations and $1.5 billion in free cash flow. Lockheed Martin returned $1.6 billion to shareholders through dividends and share repurchases.

Based on strong year-to-date performance, the company raised its 2024 full-year outlook for sales, segment operating profit, and earnings per share. The F-35 program remains a top priority, with the first Technology Refresh 3-configured aircraft delivered and 2024 deliveries expected to be 75-110 units. Lockheed Martin's backlog stands at nearly $160 billion, more than twice its annual revenue, indicating robust demand for its defense technology solutions.

Positive

• Net sales increased 9% year-over-year to $18.1 billion
• Free cash flow grew to $1.5 billion, up from $771 million in Q2 2023
• Company raised 2024 full-year outlook for sales, segment operating profit, and EPS
• Strong backlog of nearly $160 billion, over 2x annual revenue
• Delivered first Technology Refresh 3-configured F-35 aircraft

Negative

• Net earnings decreased slightly to $1.6 billion from $1.7 billion in Q2 2023
• $87 million in impairment and severance charges at RMS business segment

Insights

Financial Analyst

Lockheed Martin's second quarter financial results are impressive, showing significant growth across various key metrics. The net sales increase of 9% to $18.1 billion highlights strong demand for their defense technology solutions. Net earnings of $1.6 billion and a diluted EPS of $6.85 per share, despite some non-operational charges, indicate robust financial health.

The increase in cash from operations to $1.9 billion and free cash flow to $1.5 billion suggests efficient cash management and operational efficiency. The return of $1.6 billion to shareholders through dividends and share repurchases demonstrates Lockheed's commitment to shareholder value.

Most notably, the raised outlook for 2024 in sales, segment operating profit and earnings per share reflects management's confidence in the company's continued growth and strong backlog. For retail investors, these results suggest stability and potential for future appreciation in stock value.

Market Research Analyst

The significant backlog of nearly $160 billion, more than twice the annual revenue, is a key indicator of sustained demand for Lockheed Martin's products. This backlog ensures revenue visibility and stability, which is important for long-term planning and investment.

The company's focus on 21st Century Security® strategy and advancements in digital technologies, such as AI augmentation in the Aegis Combat System, positions them well in the evolving defense landscape. This strategic emphasis on innovation and industrial cooperation among allies and partners underpins their competitive advantage.

For retail investors, this suggests that Lockheed Martin is not only performing well financially but is also strategically positioned to capitalize on future opportunities in the defense sector, potentially leading to sustained stock performance.

Tech Expert

The delivery of the first Technology Refresh 3 (TR-3) configured F-35 aircraft is a significant milestone. This upgrade represents a major leap in capability, enhancing sensor and data management capabilities. Such advancements ensure that the F-35 remains at the forefront of military aviation technology.

The upcoming Block 4 enhancements will further cement the F-35's position as the world’s most advanced fighter aircraft, important for maintaining air superiority in modern combat scenarios. These continuous improvements in technology are likely to keep Lockheed Martin competitive in securing future contracts and maintaining its leadership in defense technology.

For retail investors, this indicates that Lockheed's ongoing investment in advanced technologies will likely drive future growth and potentially lead to increased stock valuation.

• 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

FAQ

What were Lockheed Martin's (LMT) Q2 2024 earnings per share?

Lockheed Martin reported earnings of $6.85 per share for Q2 2024, compared to $6.63 per share in Q2 2023.

How much cash did Lockheed Martin (LMT) return to shareholders in Q2 2024?

Lockheed Martin returned $1.6 billion to shareholders through dividends and share repurchases in Q2 2024.

What is Lockheed Martin's (LMT) expected F-35 delivery range for 2024?

Lockheed Martin anticipates F-35 deliveries for 2024 to be in the range of 75-110 aircraft.

How much was Lockheed Martin's (LMT) free cash flow in Q2 2024?

Lockheed Martin generated $1.5 billion in free cash flow during Q2 2024, up from $771 million in Q2 2023.