Lockheed Martin's Q1 Revenue Climbs Amid Fluctuating Profit Margins, 2024 Outlook Reaffirmed

Lockheed Martin Corp LMT reported first-quarter 2024 net sales growth of 13.7% year-over-year to $17.195 billion, above the consensus of $15.99 billion.

Adjusted EPS of $6.33, down from $6.43 YoY, topped the consensus of $5.81.

The gross margin contracted 194 bps to 11.6%. The operating profit declined slightly to $2.03 billion, and the margin contracted by 167 bps to 11.8%.

Aeronautics sales were $6.845 billion (+9% Y/Y), and the operating margin was 9.9%, down from 10.8% YoY.

Missiles and Fire Control sales of $2.99 billion (+25% Y/Y); operating margin was 10.4%, down from 15.8% YoY.

Rotary and Mission Systems sales of $4.09 billion (+16% Y/Y); operating margin 10.5%, up 50 bps. Space net sales of $3.27 billion (+10% Y/Y); operating margin 9.9%, up 40 bps.

Lockheed Martin generated cash from operating activities for the quarter of $1.635 billion, compared to $1.564 billion a year ago.

At the end of the quarter, LMT’s total backlog was $159.37 billion, a decline of 0.75% from December 31, 2023.

“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,” commented Lockheed Martin Chairman, President, and CEO Jim Taiclet.

“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,” commented Taiclet.

LMT returned $1.8 billion of cash to shareholders through dividends and share repurchases.

FY24 Outlook, reaffirmed: Lockheed Martin expects net sales of ~$68.5 billion – $70 billion versus the consensus of $69.51 billion. It sees EPS of $25.65 – $26.35 versus the consensus of $26.03.

The company sees Business segment operating profit of $7.175 billion – $7.375 billion, cash from operations of $7.75 billion – $8.05 billion, and free cash flow of $6 billion-$6.3 billion.

Price Action: LMT shares are trading higher by 0.52% at $463.73 at the last check Tuesday.

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