- Net sales of $17.2
billion
- Net earnings of $1.5 billion,
or $6.39 per share
- Cash from operations of $1.6
billion and free cash flow of $1.3
billion
- $1.8 billion of cash
returned to shareholders through dividends and share
repurchases
- Reaffirms 2024 financial outlook
BETHESDA, Md.,
April 23,
2024 /PRNewswire/ -- Lockheed Martin Corporation
[NYSE: LMT] today reported first quarter 2024 net sales of
$17.2 billion, compared to
$15.1 billion in the first quarter of
2023. Net earnings in the first quarter of 2024 were $1.5 billion, or $6.39 per share, compared to $1.7 billion or $6.61 per share, in the first quarter of
2023. Cash from operations was $1.6
billion in both the first quarters of 2024 and 2023. Free
cash flow was $1.3 billion in both
the first quarters of 2024 and 2023. First quarter 2024 results
included 13 weeks compared to 12 weeks for first quarter 2023.
"Our strong start to 2024 demonstrates our continued success
designing, developing and delivering 21st Century Security
solutions in support of integrated deterrence for customers around
the world. These first quarter results reinforce our confidence in
our ability to achieve the full year financial expectations we set
in January," said Lockheed Martin Chairman, President and CEO
Jim Taiclet. "First quarter sales
increased significantly year-over-year and we generated robust free
cash flow of nearly $1.3 billion,
while taking assertive actions to further strengthen production
capacity. In addition, we continued our disciplined and dynamic
capital deployment by investing over $700
million into R&D and capital projects and returned
significant capital to shareholders through dividends and share
repurchases as we remain committed to delivering meaningful free
cash flow per share growth over the long-term.
"Our $159 billion backlog includes
several large National Security Space awards in the quarter and
attests to the breadth of our portfolio, depth of our technical
expertise, and understanding of our customers' needs. These
capabilities uniquely position us to lead the realization of joint
all domain operations, including reliable battle management and
command and control systems integrated across multiple domains,
military services, and allied forces. We remain exceptionally
focused on the execution of the F-35 program, working with our
customers and suppliers to implement TR-3 capabilities, and are
encouraged by the progress towards delivery of the first TR-3
configured aircraft. The innovation and open architecture solutions
across our portfolio enable customers worldwide to stay prepared
and agile amidst an ever-changing threat environment."
Adjusted earnings before income taxes, net earnings and
diluted EPS
The table below shows the impact to earnings before income
taxes, net earnings and diluted earnings per share (EPS) for
certain non-operational items:
|
(in millions,
except per share data)
|
|
Quarters
Ended
|
|
|
|
|
March
31,
2024
|
|
March
26,
2023
|
|
|
|
|
Earnings
Before
Income
Taxes
|
Net
Earnings
|
Diluted
EPS
|
|
Earnings
Before
Income
Taxes
|
Net
Earnings
|
Diluted
EPS
|
|
|
As Reported
(GAAP)
|
|
$ 1,835
|
$ 1,545
|
$
6.39
|
|
$ 1,994
|
$ 1,689
|
$ 6.61
|
|
|
Mark-to-market
investment gains1
|
|
(18)
|
(14)
|
(0.06)
|
|
(58)
|
(44)
|
(0.18)
|
|
|
As Adjusted
(Non-GAAP)2
|
|
$ 1,817
|
$ 1,531
|
$
6.33
|
|
$ 1,936
|
$ 1,645
|
$ 6.43
|
|
|
|
|
|
|
|
|
1
|
Includes changes in
valuations of the company's net assets and liabilities for deferred
compensation plans and early-stage company
investments.
|
|
2
|
See the "Use of
Non-GAAP Financial Measures" section of this news release for more
information.
|
|
|
|
|
Summary Financial Results
The following table presents the company's summary financial
results.
|
(in millions,
except per share data)
|
|
Quarters
Ended
|
|
|
|
|
March
31,
2024
|
|
March
26,
2023
|
|
|
Net
sales
|
|
$
17,195
|
|
$
15,126
|
|
|
|
|
|
|
|
|
|
Business segment
operating profit1
|
|
$
1,745
|
|
$
1,682
|
|
|
Unallocated
items
|
|
|
|
|
|
|
FAS/CAS
operating adjustment
|
|
406
|
|
415
|
|
|
Intangible
asset amortization expense
|
|
(61)
|
|
(62)
|
|
|
Other,
net
|
|
(61)
|
|
2
|
|
|
Total unallocated
items
|
|
284
|
|
355
|
|
|
Consolidated
operating profit
|
|
$
2,029
|
|
$
2,037
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
$
1,545
|
|
$
1,689
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
$
6.39
|
|
$
6.61
|
|
|
|
|
|
|
|
|
|
Cash from
operations2
|
|
$
1,635
|
|
$
1,564
|
|
|
Capital
expenditures
|
|
(378)
|
|
(294)
|
|
|
Free cash
flow1,2
|
|
$
1,257
|
|
$
1,270
|
|
|
|
|
|
|
|
|
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
|
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)
|
|
|
2024
Outlook1
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
$68,500 -
$70,000
|
|
|
|
|
|
|
|
|
Business segment
operating profit2
|
|
|
$7,175-
$7,375
|
|
|
|
|
|
|
|
|
Total FAS/CAS pension
adjustment3
|
|
|
~$1,685
|
|
|
|
|
|
|
|
|
Diluted earnings per
share4
|
|
|
$25.65 -
$26.35
|
|
|
|
|
|
|
|
|
Cash from
operations
|
|
|
$7,750 -
$8,050
|
|
|
Capital
expenditures
|
|
|
~$1,750
|
|
|
Free cash
flow2
|
|
|
$6,000 -
$6,300
|
|
|
|
|
|
|
|
1
|
The company's current
2024 financial outlook does not include any future gains or losses
related to changes in valuations of the company's
net assets and liabilities for deferred compensation plans or
early-stage company investments. The company's financial outlook
reflects no
significant reduction in customer budgets or changes in priorities,
continued support and funding of the company's programs, and a
statutory
tax rate of 21%. In addition, the outlook includes known impacts
from inflationary pressures and labor and supply chain challenges
at the time
of this news release and experienced to date.
|
|
2
|
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.
|
|
3
|
The total FAS/CAS
pension adjustment is presented as a single amount and includes
total expected U.S. Government cost accounting
standards (CAS) pension cost of approximately $1.7 billion. Total
expected financial accounting standards (FAS) pension income is
not
significant. For additional detail regarding the pension amounts
reported in operating and non-operating results, refer to the
supplemental table
included at the end of this news release.
|
|
4
|
Although the company
typically does not update its outlook for proposed changes in law,
the above includes the effect of Notice 2023-63
confirming that certain expenditures incurred in the performance of
cost-type contracts are not subject to capitalization. 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
Cash from operations in the first quarter of 2024 was
$1.6 billion and capital expenditures
were $378 million, resulting in free cash flow of $1.3 billion. The operating and free cash flows
for the first quarter of 2024 were comparable to the same period in
2023.
The company's cash activities in the quarter ended
March 31, 2024, included the following:
- paying cash dividends of $780
million;
- paying $1.0 billion to repurchase
2.3 million shares; and
- receiving net proceeds of $2
billion from a debt issuance of senior unsecured notes,
consisting of $650 million aggregate
principal amount of 4.50% Notes due 2029, $600 million aggregate principal amount of 4.80%
Notes due 2034 and $750 million
aggregate principal amount of 5.20% Notes due 2064.
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
|
|
|
|
|
March
31,
2024
|
|
March
26,
2023
|
|
|
Net
sales
|
|
|
|
|
|
|
Aeronautics
|
|
$
6,845
|
|
$
6,269
|
|
|
Missiles and Fire
Control
|
|
2,993
|
|
2,388
|
|
|
Rotary and Mission
Systems
|
|
4,088
|
|
3,510
|
|
|
Space
|
|
3,269
|
|
2,959
|
|
|
Total net
sales
|
|
$
17,195
|
|
$
15,126
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
|
|
|
|
|
Aeronautics
|
|
$
679
|
|
$
675
|
|
|
Missiles and Fire
Control
|
|
311
|
|
377
|
|
|
Rotary and Mission
Systems
|
|
430
|
|
350
|
|
|
Space
|
|
325
|
|
280
|
|
|
Total business
segment operating
profit
|
|
1,745
|
|
1,682
|
|
|
Unallocated
items
|
|
|
|
|
|
|
FAS/CAS operating
adjustment
|
|
406
|
|
415
|
|
|
Intangible asset
amortization
expense
|
|
(61)
|
|
(62)
|
|
|
Other, net
|
|
(61)
|
|
2
|
|
|
Total unallocated
items
|
|
284
|
|
355
|
|
|
Total consolidated
operating profit
|
|
$
2,029
|
|
$
2,037
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales and operating profit of the company's business
segments exclude intersegment sales, cost of sales, and profit as
these activities are eliminated in consolidation and not included
in management's evaluation of performance of each segment. Business
segment operating profit includes the company's share of earnings
or losses from equity method investees as the operating activities
of the equity method investees are closely aligned with the
operations of the company's business segments.
Business segment operating profit excludes the FAS/CAS pension
operating adjustment, a portion of corporate costs not considered
allowable or allocable to contracts with the U.S. Government under
the applicable U.S. Government cost accounting standards (CAS) or
federal acquisition regulations (FAR), and other items not
considered part of management's evaluation of segment operating
performance such as a portion of management and administration
costs, legal fees and settlements, environmental costs, stock-based
compensation expense, retiree benefits, significant severance
actions, significant asset impairments, gains or losses from
divestitures, intangible asset amortization expense, and other
miscellaneous corporate activities. Excluded items are included in
the reconciling item "Unallocated items" between operating profit
from the company's business segments and its consolidated operating
profit.
Changes in net sales and operating profit generally are
expressed in terms of volume, contract mix, and/or performance
(referred to as profit adjustments). Changes in volume refer to
increases or decreases in sales or operating profit resulting from
varying production activity levels, deliveries or service levels on
individual contracts. Volume changes in segment operating profit
are typically based on the current profit booking rate for a
particular contract. Contract mix refers to changes in the ratio of
contract type or life cycle (e.g., cost-type, fixed-price,
development, production and/or sustainment). In addition,
comparability of the company's segment sales, operating profit and
operating margin may be impacted favorably or unfavorably by
changes in profit booking rates on the company's contracts.
Increases in profit booking rates, typically referred to as
favorable profit adjustments, usually relate to revisions in the
estimated total costs to fulfill the performance obligations that
reflect improved conditions on a particular contract. Conversely,
conditions on a particular contract may deteriorate, resulting in
an increase in the estimated total costs to fulfill the performance
obligations and a reduction in the profit booking rate and are
typically referred to as unfavorable profit adjustments. Increases
or decreases in profit booking rates are recognized in the period
they are determined and reflect the inception-to-date effect of
such changes.
The company's consolidated net favorable profit booking rate
adjustments represented approximately 11% and 25% of total segment
operating profit in the quarters ended March 31, 2024 and
March 26, 2023. The decrease in the net favorable profit
booking rate adjustments was driven by a $100 million reach-forward loss recognized on a
classified program at MFC after updating the company's assessment
of the likelihood that the options may be exercised and concluded
that an option would be exercised based on progress made on the
program and discussions with the customer. In addition to this
reach-forward loss, net favorable profit booking rate adjustments
were lower by $120 million, see the
discussion below.
Aeronautics
|
(in millions)
|
|
Quarters
Ended
|
|
|
|
|
March
31,
2024
|
|
March
26,
2023
|
|
|
Net
sales
|
|
$
6,845
|
|
$
6,269
|
|
|
Operating
profit
|
|
679
|
|
675
|
|
|
Operating
margin
|
|
9.9 %
|
|
10.8 %
|
|
Aeronautics' net sales in the first quarter of 2024 increased
$576 million, or 9%, compared to the
same period in 2023. The increase was primarily attributable to
higher net sales of $305 million on
the F-35 program due to higher volume on production, development
and sustainment contracts; $155
million on classified programs driven by higher volume; and
$60 million on the F-16 program due
to the ramp up on production.
Aeronautics' operating profit in the first quarter of 2024 was
comparable to the same period in 2023. Operating profit increased
$50 million on the F-16 program as
operating profit for the first quarter of 2023 reflects the impact
of unfavorable profit adjustments on a production contract and
sustainment contracts as a result of schedule delays related to
software and technical specification risks that did not recur in
the first quarter of 2024. This increase was partially offset by
lower operating profit of $30 million
on the F-35 program primarily due to lower net profit adjustments
on production contracts as a result of higher than anticipated
material costs, partially offset by higher volume described above.
Total net profit booking rate adjustments were $40 million lower in the first quarter of 2024
compared to the same period in 2023.
Missiles and Fire Control
|
(in millions)
|
|
Quarters
Ended
|
|
|
|
|
March
31,
2024
|
|
March
26,
2023
|
|
|
Net
sales
|
|
$
2,993
|
|
$
2,388
|
|
|
Operating
profit
|
|
311
|
|
377
|
|
|
Operating
margin
|
|
10.4 %
|
|
15.8 %
|
|
MFC's net sales in the first quarter of 2024 increased
$605 million, or 25% compared to the
same period in 2023. The increase was primarily attributable to
higher net sales of $460 million for
tactical and strike missile programs due to production ramp up on
Guided Multiple Launch Rocket Systems (GMLRS), High Mobility
Artillery Rocket System (HIMARS), Joint Air-to-Surface Standoff
Missile (JASSM) and Long Range Anti-Ship Missile (LRASM) programs;
and $100 million for integrated air
and missile defense programs primarily due to higher volume on
PAC-3 and Terminal High Altitude Area Defense (THAAD).
MFC's operating profit in the first quarter of 2024 decreased
$66 million, or 18%, compared to the
same period in 2023. The decrease was primarily attributable to
lower operating profit for tactical and strike missile programs due
to a $100 million reach-forward loss
recognized for an option on a classified program and an unfavorable
profit adjustment on HELLFIRE as a result of additional costs
expected to be incurred associated with a contract claim,
partially offset by the production ramp up described above. Total
net profit booking rate adjustments, inclusive of the $100 million loss described above, were
$120 million lower in the first
quarter of 2024 compared to the same period in 2023.
Rotary and Mission Systems
|
(in millions)
|
|
Quarters
Ended
|
|
|
|
|
March
31,
2024
|
|
March
26,
2023
|
|
|
Net
sales
|
|
$
4,088
|
|
$
3,510
|
|
|
Operating
profit
|
|
430
|
|
350
|
|
|
Operating
margin
|
|
10.5 %
|
|
10.0 %
|
|
RMS' net sales in the first quarter of 2024 increased
$578 million, or 16% compared to the
same period in 2023. The increase was primarily attributable to
higher net sales of $295 million on
integrated warfare systems and sensors (IWSS) programs due to new
program ramp up within the laser systems portfolio and higher
volume on the Aegis and radar programs; $150
million for various C6ISR (command, control, communications,
computers, cyber, combat systems, intelligence, surveillance, and
reconnaissance) programs due to higher volume; and $100 million for Sikorsky helicopter programs due
to higher volume on Seahawk and CH-53K programs.
RMS' operating profit in the first quarter of 2024 increased
$80 million, or 23%, compared to the
same period in 2023. The increase was primarily attributable to
higher operating profit of $40
million on IWSS programs due to higher volume described
above and a favorable profit rate adjustment as a result of the
delivery of a ground-based radar which retired the technical risk;
and $25 million on Sikorsky
helicopter programs due to higher volume described above and higher
margins due to contract mix, partially offset by unfavorable profit
adjustments on Seahawk programs. Total net profit booking rate
adjustments were $30 million lower in
the first quarter of 2024 compared to the same period in 2023.
Space
|
(in millions)
|
|
Quarters
Ended
|
|
|
|
|
March
31,
2024
|
|
March
26,
2023
|
|
|
Net
sales
|
|
$
3,269
|
|
$
2,959
|
|
|
Operating
profit
|
|
325
|
|
280
|
|
|
Operating
margin
|
|
9.9 %
|
|
9.5 %
|
|
Space's net sales in the first quarter of 2024 increased
$310 million, or 10%, compared to the
same period in 2023. The increase was primarily attributable to
higher net sales of $140 million for
strategic and missile defense programs due to higher volume on
Fleet Ballistic Missile (FBM) and ramp up in the hypersonic and
Next Generation Interceptor (NGI) development programs; and higher
net sales of $115 million for
national security space programs due to higher volume on Transport
Layer and GPS III programs and ramp up on the Tracking Layer
program.
Space's operating profit in the first quarter of 2024 increased
$45 million, or 16%, compared to the
same period in 2023. The increase was primarily attributable to
$30 million of higher equity earnings
from the company's investment in United Launch Alliance (ULA) due
to higher launch volume, and higher operating profit of
$20 million on strategic and missile
defense programs due to the higher volume described above. These
increases were partially offset by lower operating profit of
$25 million for national security
space programs due to the impact of lower net favorable profit
adjustments on Next Gen OPIR as a result of the timing of the award
and incentive fee assessments. Total net profit booking rate
adjustments were $30 million lower in
the first quarter of 2024 compared to the same period in 2023.
Total equity earnings/(losses) (primarily ULA) represented
approximately $15 million or 5% in
the first quarter of 2024, compared to approximately $(15) million or (5)% for the same period in
2023.
Income Taxes
The company's effective income tax rate was 15.8% and 15.3% for
the quarters ended March 31, 2024 and
March 26, 2023. The rates for all
periods benefited from research and development tax credits, tax
deductions for foreign derived intangible income, dividends paid to
the company's defined contribution plans with an employee stock
ownership plan feature and employee equity awards.
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)
|
|
|
2024
Outlook
|
|
|
Business segment
operating profit (non-GAAP)
|
|
|
$7,175 -
$7,375
|
|
|
FAS/CAS operating
adjustment1
|
|
|
~1,625
|
|
|
Intangible asset
amortization expense
|
|
|
~(245)
|
|
|
Other, net
|
|
|
~(400)
|
|
|
Consolidated
operating profit (GAAP)
|
|
|
~$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.
|
|
|
|
|
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 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.
Webcast and Conference Call Information
Lockheed Martin Corporation will webcast live the earnings
results conference call (listen-only mode) on Tuesday, April 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, and 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
|
|
|
March 31,
2024
|
|
March 26,
2023
|
Net sales
|
|
$
17,195
|
|
$
15,126
|
Cost of
sales
|
|
(15,202)
|
|
(13,080)
|
Gross profit
|
|
1,993
|
|
2,046
|
Other income (expense),
net
|
|
36
|
|
(9)
|
Operating profit
|
|
2,029
|
|
2,037
|
Interest
expense
|
|
(255)
|
|
(202)
|
Non-service FAS pension
income
|
|
16
|
|
110
|
Other non-operating
income, net
|
|
45
|
|
49
|
Earnings before income
taxes
|
|
1,835
|
|
1,994
|
Income tax
expense
|
|
(290)
|
|
(305)
|
Net earnings
|
|
$
1,545
|
|
$
1,689
|
Effective tax
rate
|
|
15.8 %
|
|
15.3 %
|
|
|
|
|
|
Earnings per common share
|
|
|
|
|
Basic
|
|
$
6.42
|
|
$
6.63
|
Diluted
|
|
$
6.39
|
|
$
6.61
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
|
|
|
Basic
|
|
240.7
|
|
254.7
|
Diluted
|
|
241.6
|
|
255.7
|
|
|
|
|
|
Common shares reported
in stockholders'
equity at end of
period
|
|
239
|
|
254
|
|
|
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 March 31, for the first quarter of 2024 and March 26,
for the first 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.
|
|
Lockheed Martin
Corporation Business Segment Summary Operating
Results (unaudited; in millions)
|
|
|
|
|
|
Quarters
Ended
|
|
|
|
|
|
March 31,
2024
|
|
March 26,
2023
|
|
%
Change
|
|
Net
sales
|
|
|
|
|
|
|
|
Aeronautics
|
|
$
6,845
|
|
$
6,269
|
|
9 %
|
|
Missiles and Fire
Control
|
|
2,993
|
|
2,388
|
|
25 %
|
|
Rotary and Mission
Systems
|
|
4,088
|
|
3,510
|
|
16 %
|
|
Space
|
|
3,269
|
|
2,959
|
|
10 %
|
|
Total net
sales
|
|
$ 17,195
|
|
$ 15,126
|
|
14 %
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
|
|
|
|
|
|
Aeronautics
|
|
$
679
|
|
$
675
|
|
1 %
|
|
Missiles and Fire
Control
|
|
311
|
|
377
|
|
(18 %)
|
|
Rotary and Mission
Systems
|
|
430
|
|
350
|
|
23 %
|
|
Space
|
|
325
|
|
280
|
|
16 %
|
|
Total business
segment operating
profit
|
|
1,745
|
|
1,682
|
|
4 %
|
|
Unallocated
items
|
|
|
|
|
|
|
|
FAS/CAS operating
adjustment
|
|
406
|
|
415
|
|
|
|
Intangible asset
amortization expense
|
|
(61)
|
|
(62)
|
|
|
|
Other, net
|
|
(61)
|
|
2
|
|
|
|
Total unallocated
items
|
|
284
|
|
355
|
|
(20 %)
|
|
Total consolidated
operating
profit
|
|
$
2,029
|
|
$
2,037
|
|
— %
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
|
|
|
|
|
|
Aeronautics
|
|
9.9 %
|
|
10.8 %
|
|
|
|
Missiles and Fire
Control
|
|
10.4 %
|
|
15.8 %
|
|
|
|
Rotary and Mission
Systems
|
|
10.5 %
|
|
10.0 %
|
|
|
|
Space
|
|
9.9 %
|
|
9.5 %
|
|
|
|
Total business
segment operating
margin
|
|
10.1 %
|
|
11.1 %
|
|
|
|
|
|
|
|
|
|
|
|
Total consolidated
operating
margin
|
|
11.8 %
|
|
13.5 %
|
|
|
|
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)
|
|
|
|
|
|
March 31,
2024
|
|
Dec.
31, 2023
|
|
Assets
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
2,790
|
|
$
1,442
|
|
Receivables,
net
|
|
2,257
|
|
2,132
|
|
Contract
assets
|
|
14,050
|
|
13,183
|
|
Inventories
|
|
3,278
|
|
3,132
|
|
Other current
assets
|
|
583
|
|
632
|
|
Total current
assets
|
|
22,958
|
|
20,521
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
8,354
|
|
8,370
|
|
Goodwill
|
|
10,789
|
|
10,799
|
|
Intangible assets,
net
|
|
2,151
|
|
2,212
|
|
Deferred income
taxes
|
|
3,024
|
|
2,953
|
|
Other noncurrent
assets
|
|
7,687
|
|
7,601
|
|
Total
assets
|
|
$
54,963
|
|
$
52,456
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
|
$
3,523
|
|
$
2,312
|
|
Salaries, benefits and
payroll taxes
|
|
2,679
|
|
3,133
|
|
Contract
liabilities
|
|
8,745
|
|
9,190
|
|
Current maturities of
long-term debt
|
|
168
|
|
168
|
|
Other current
liabilities
|
|
2,584
|
|
2,134
|
|
Total current
liabilities
|
|
17,699
|
|
16,937
|
|
|
|
|
|
|
|
Long-term debt,
net
|
|
19,250
|
|
17,291
|
|
Accrued pension
liabilities
|
|
6,133
|
|
6,162
|
|
Other noncurrent
liabilities
|
|
5,231
|
|
5,231
|
|
Total
liabilities
|
|
48,313
|
|
45,621
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
Common stock, $1 par
value per share
|
|
239
|
|
240
|
|
Additional paid-in
capital
|
|
—
|
|
—
|
|
Retained
earnings
|
|
15,222
|
|
15,398
|
|
Accumulated other
comprehensive loss
|
|
(8,811)
|
|
(8,803)
|
|
Total stockholders'
equity
|
|
6,650
|
|
6,835
|
|
Total liabilities and
equity
|
|
$
54,963
|
|
$
52,456
|
Lockheed Martin
Corporation Consolidated Statements of Cash
Flows (unaudited; in millions)
|
|
|
|
Quarters
Ended
|
|
|
March 31,
2024
|
|
March 26,
2023
|
Operating
activities
|
|
|
|
|
Net earnings
|
|
$
1,545
|
|
$
1,689
|
Adjustments to
reconcile net earnings to net cash provided by operating
activities
|
|
|
|
|
Depreciation and
amortization
|
|
351
|
|
325
|
Stock-based
compensation
|
|
61
|
|
57
|
Deferred income
taxes
|
|
(77)
|
|
(117)
|
Changes in assets and
liabilities
|
|
|
|
|
Receivables,
net
|
|
(125)
|
|
(78)
|
Contract
assets
|
|
(867)
|
|
(871)
|
Inventories
|
|
(146)
|
|
(383)
|
Accounts
payable
|
|
1,301
|
|
1,217
|
Contract
liabilities
|
|
(445)
|
|
(152)
|
Income
taxes
|
|
341
|
|
414
|
Qualified defined
benefit pension plans
|
|
(1)
|
|
(94)
|
Other, net
|
|
(303)
|
|
(443)
|
Net cash provided
by operating activities
|
|
1,635
|
|
1,564
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
Capital
expenditures
|
|
(378)
|
|
(294)
|
Other, net
|
|
6
|
|
35
|
Net cash used for
investing activities
|
|
(372)
|
|
(259)
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
Issuance of long-term
debt, net of related costs
|
|
1,980
|
|
—
|
Repurchases of common
stock
|
|
(1,000)
|
|
(500)
|
Dividends
paid
|
|
(780)
|
|
(784)
|
Other, net
|
|
(115)
|
|
(128)
|
Net cash provided
by (used for) financing activities
|
|
85
|
|
(1,412)
|
|
|
|
|
|
Net change in cash
and cash equivalents
|
|
1,348
|
|
(107)
|
Cash and cash
equivalents at beginning of period
|
|
1,442
|
|
2,547
|
Cash and cash
equivalents at end of period
|
|
$
2,790
|
|
$
2,440
|
|
Lockheed Martin
Corporation
Other Financial and Operating Information
(unaudited; in millions, except for aircraft deliveries and
weeks)
|
|
|
|
Backlog
|
|
March
31, 2024
|
|
Dec.
31, 2023
|
|
Aeronautics
|
|
$
57,035
|
|
$
60,156
|
|
Missiles and Fire
Control
|
|
31,297
|
|
32,229
|
|
Rotary and Mission
Systems
|
|
38,030
|
|
37,726
|
|
Space
|
|
33,006
|
|
30,456
|
|
Total
backlog
|
|
$
159,368
|
|
$
160,567
|
|
|
|
Quarters
Ended
|
|
Aircraft
Deliveries
|
|
March 31,
2024
|
|
March 26,
2023
|
|
F-35
|
|
—
|
|
5
|
|
F-16
|
|
3
|
|
1
|
|
C-130J
|
|
4
|
|
2
|
|
Government helicopter
programs
|
|
13
|
|
10
|
|
Commercial helicopter
programs
|
|
—
|
|
1
|
|
International military
helicopter programs
|
|
—
|
|
—
|
|
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