Lockheed Martin Reaffirms 2025 Outlook

Image: Lockheed Martin’s shares have been on a wild ride the past few years.

By Brian Nelson, CFA

On April 22, Lockheed Martin (LMT) reported better than expected first quarter results with revenue and GAAP earnings per share exceeding the consensus forecast. Sales increased 4%, while net earnings came in at $1.7 billion, or $7.28 per share, compared to $1.5 billion, or $6.39 per share, in the same period a year ago. Cash flow from operations came in at $1.4 billion compared to $1.6 billion in last year’s quarter, while free cash flow dipped to $955 million from $1.3 billion in the year-ago period.

Management was optimistic in the press release:

The momentum we created last year continued into the first quarter of 2025, with sales growing 4% year-over-year and free cash flow generation of $955 million. We continued investing in the business with over $850 million of research and development and capital expenditures in the quarter, and returned $1.5 billion to shareholders through dividends and share repurchases. These solid first quarter results reinforce confidence in our ability to achieve the full year 2025 financial guidance we laid out in January, demonstrating the resilience and adaptability of Lockheed Martin’s franchises amidst a highly dynamic geopolitical and technical environment.

We are focused on operational excellence to drive the timely and efficient execution of our $173 billion backlog, which represents more than two years of sales. We remain committed to realizing our vision of digital and interoperable systems and are aligning our mission roadmaps to best support our customers’ rapidly evolving security needs, both domestic and global. This focus, along with Lockheed Martin’s track record of innovation and performance, continues to result in new awards, including the recent missiles contracts for Precision Strike Missiles, THAAD and JASSM/LRASM, as well as the Trident II D5 Life Extension, comprising up to $10 billion of future work.

During the first quarter, Lockheed paid cash dividends of $796 million while it repurchased 1.7 million shares for $750 million. Looking to all of 2025, management expects sales in the range of $73.75-$74.75 billion, business segment operating profit of $8.1-$8.2 billion, and diluted earnings per share of $27.00-$27.30. For 2025, cash flow from operations is targeted at $8.5-$8.7 billion with capital spending expected at $1.9 billion, resulting in free cash flow in the range of $6.6-$6.8 billion for the year. We continue to like Lockheed Martin as a core idea in the simulated Dividend Growth Newsletter portfolio. Shares yield 2.9% at the time of this writing.

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