Image Source: Lockheed Martin
By Brian Nelson, CFA
On January 28, Lockheed Martin (LMT) reported lower than expected fourth quarter results with revenue and GAAP earnings per share missing the consensus forecasts. Quarterly revenue dropped 1.3%, while net earnings for the fourth quarter came in at $527 million, or $2.22 per share, a level that includes $1.7 billion of charges for classified programs in its Aeronautics and Missiles and Fire Control (MFC) business segments. Net earnings were $1.9 billion, or $7.58 per share in the fourth quarter of 2023.
Cash flow from operations was $1.0 billion in the fourth quarter of 2024, after a pension contribution of $990 million, compared to $2.4 billion in the fourth quarter of 2023. Free cash flow in the quarter was $441 million, after pension contributions, versus $1.7 billion in the same period a year ago. At the end of 2024, Lockheed Martin had a record backlog of $176 billion.
Management had the following to say about the year:
2024 was another successful and productive year for Lockheed Martin. Our 5% sales growth and record year-end backlog of $176 billion demonstrate the enduring global demand for our advanced defense technology and systems. In the year, we invested over $3 billion in advancing our nation’s security through research and development and capital investment to support our customers’ missions, drive innovation and transform our operations with the latest digital and manufacturing technologies. Our strong and consistent performance also enabled us to again return greater than 100% of free cash flow to our shareholders in 2024.
Lockheed paid $3.1 billion in cash dividends in 2024, while it spent $3.7 billion in share buybacks during the year. Looking to 2025, Lockheed Martin expects revenue in the range of $73.75-$74.75 billion, in line with the consensus forecast of $74.1 billion, business segment operating profit of $8.1-$8.2 billion, while diluted earnings per share is targeted in the range of $27-$27.30, below the consensus forecast of $27.94. Cash flow from operations is expected in the range of $8.5-$8.7 billion in 2025, while free cash flow is expected in the range of $6.6-$6.8 billion, after roughly $1.9 billion in capital spending. Shares yield 2.9% at the time of this writing.
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Brian Nelson owns shares in SPY, SCHG, QQQ, QQQM, DIA, VOT, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, QQQM, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, RSP, SCHG, QQQ, QQQM, and VOO. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
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