Lockheed Martin ((LMT)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The latest earnings call from Lockheed Martin painted a picture of robust performance, underscored by a record backlog and impressive sales growth. This success was largely attributed to strategic investments and effective execution of key programs, notably the F-35 program. However, the company faced challenges, including significant charges related to classified programs and difficulties in certain segments such as Aeronautics and RMS.
Record Backlog
Lockheed Martin’s backlog reached an unprecedented $176 billion, reflecting a 10% increase compared to the previous year. This milestone underscores the strong demand for Lockheed Martin’s products and solutions across various markets.
Sales Growth
The company reported a 5% year-over-year sales growth for 2024, bolstered by consistent demand across all business areas. This growth trajectory highlights the company’s ability to leverage its diverse portfolio to meet market needs.
F-35 Program Success
A key highlight was the successful delivery of 110 F-35 aircraft in 2024, hitting the upper end of the projected range. Looking ahead, the company plans to increase deliveries further, aiming for 170 to 190 in 2025.
Investment in R&D
Lockheed Martin has committed $3.3 billion to research and development, along with capital expenditures to drive advanced technology solutions. This investment aligns with the company’s strategy to maintain its technological edge in the defense sector.
Strong Order Intake
The fourth quarter saw an impressive order intake of over $29 billion, with the Aeronautics division leading the charge thanks to substantial F-35 contracts, contributing nearly $20 billion.
Classified Program Charges
Despite overall positive performance, the company faced $1.8 billion in charges related to classified programs, predominantly affecting the MFC and Aeronautics segments, which weighed on operating profit.
Aeronautics Segment Challenges
The Aeronautics segment experienced an 11% decline in operating profit for the year, primarily due to lower profit rate adjustments and the aforementioned classified program charges.
RMS Sales Decline
Sales in the RMS segment decreased by 10% in the fourth quarter, attributed to reduced volume on several key programs, reflecting segment-specific challenges.
Forward-Looking Guidance
Looking ahead to 2025, Lockheed Martin anticipates mid-single digit sales growth and a return to 11% operating profit margins. The company forecasts double-digit growth in free cash flow per share, building on the $5.3 billion free cash flow achieved in 2024, with significant share repurchases already taking place.
In conclusion, Lockheed Martin’s earnings call conveyed a positive sentiment overall, highlighting strong sales growth and strategic investments despite some operational challenges. Key takeaways include the record backlog, growth in the F-35 program, and robust forward guidance, positioning the company well for future success.
