Key Points

  • Revenue growth of 9% YoY, with Q2 2024 net sales reaching $18.1 billion.
  • Free cash flow more than doubled, hitting $1.5 billion in Q2 2024.
  • Updated full-year guidance reflects increased confidence in performance.

Lockheed Martin Corporation, (LMT 0.46%) a leading released its second-quarter 2024 earnings results on July 23, showcasing robust financial performance. The company's net sales increased by 9% year-over-year to $18.1 billion. However, net earnings slightly declined to $1.6 billion from $1.7 billion the previous year, translating to diluted earnings per share (EPS) of $6.85. Management increased its full-year expectations, demonstrating optimism that growth will continue during upcoming quarters.

Overview of Lockheed Martin Corporation

Lockheed Martin Corporation is a leading global aerospace and defense company engaged in the research, design, development, manufacture, integration, and sustainment of advanced technology systems, products, and services. Its business encompasses key areas, including aeronautics, missiles and fire control, rotary and mission systems, and space.

Recently, the company has focused on several strategic areas including the F-35 program, hypersonics, and classified programs. The performance in these areas is essential for sustaining long-term growth and profitability.

Notable Developments During Q2 2024

Business Segments

In Q2 2024, Lockheed Martin saw increased sales across its key business segments.

The Aeronautics division reported net sales of $7.28 billion, up 6% from $6.88 billion in Q2 2023. The division’s operating profit was $751 million with a 10.3% margin. Increased sales volumes on the F-35 and F-16 programs were primary drivers.

The Missiles and Fire Control segment experienced a 13% rise in net sales to $3.1 billion, driven by production ramp-ups on the Guided Multiple Launch Rocket Systems and Long Range Anti-Ship Missile programs. Operating profit in the MFC segment grew to $450 million, marking a 14.5% margin.

In Rotary and Mission Systems, net sales saw a 17% increase to $4.55 billion, with an operating profit of $495 million. This growth stemmed from higher volumes on radar programs, new laser systems, and increased helicopter production volumes.

The Space segment also saw marginal improvements, with net sales at $3.2 billion, a modest 1% increase. Operating profit rose to $346 million, and margins improved to 10.8% from 9.9% the previous year. Higher volumes in strategic and missile defense programs drove these results, although declines were noted in national security space and commercial civil space sectors.

Significantly, the F-35 program continues to dominate Lockheed Martin’s performance. The company delivered its first Technology Refresh 3-configured F-35 aircraft and expects to meet delivery estimates for 2024, ranging between 75 and 110 units.

Financials

Free cash flow nearly doubled to $1.5 billion, supported by increased volume and improved contractual milestone payments. The company's backlog was reported at nearly $158 billion, securing future revenue flows.

Looking Ahead

Lockheed Martin increased its full-year guidance, projecting net sales between $70.5 billion and $71.5 billion, and EPS in the range of $26.10 to $26.60. The company's cash flow from operations guidance remains strong at $7.75 billion to $8.05 billion with free cash flow expected between $6.0 billion and $6.3 billion.

Investors should keep an eye on in hypersonics, classified programs, and the F-35 program’s deliveries.