BETHESDA, Md., Jan. 28, 2025 /PRNewswire/ — Lockheed Martin Corporation [NYSE: LMT] today reported fourth quarter 2024 net sales of $18.6 billion, compared to $18.9 billion in the fourth quarter of 2023. Net earnings in the fourth quarter of 2024 were $527 million, or $2.22 per share, including $1.7 billion ($1.3 billion, or $5.45 per share, after-tax) of losses for classified programs, compared to $1.9 billion, or $7.58 per share, in the fourth quarter of 2023. Cash 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 was $441 million in the fourth quarter of 2024, after a pension contribution of $990 million, compared to $1.7 billion in the fourth quarter of 2023. Fourth quarter 2024 results included 13 weeks, compared to 14 weeks for fourth quarter 2023, which had an unfavorable impact on sales volume across the company.
Net sales in 2024 were $71.0 billion, compared to $67.6 billion in 2023. Net earnings in 2024 were $5.3 billion, or $22.31 per share, including $2.0 billion ($1.5 billion, or $6.16 per share, after-tax) of losses for classified programs, compared to $6.9 billion, or $27.55 per share, in 2023. Cash from operations was $7.0 billion in 2024, after a pension contribution of $990 million, compared to $7.9 billion in 2023. Free cash flow was $5.3 billion in 2024, after a pension contribution of $990 million, compared to $6.2 billion in 2023.
“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,” said Jim Taiclet, Lockheed Martin’s Chairman, President and CEO. “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.”
“We also continue to drive collaboration across government and all sectors of American industry to accelerate innovation, improve resilience and integrate emerging technologies to deter, and if necessary to win any potential armed conflict,” continued Taiclet.
“Lockheed Martin is committed to developing and delivering the best military capabilities in the world, better than any potential adversary can hope to have. One of our most critical investments in 2024 was in ensuring continued air superiority for the United States and its allies. We are fully committed to developing a combined air power solution set that integrates new 6th generation with current 5th generation and 4th generation aircraft using wingman drones, AI, advanced sensors in space and in the air, and 5G-level, cyber-hardened data links. Our leading technical and manufacturing capabilities, the innovative spirit that originated in our Skunk Works® operation, our incredibly capable workforce, along with the derisking actions we executed in the fourth quarter, position us well for strong performance in 2025. We look forward to working with the incoming administration to best serve our customers with highly reliable, theater-level mission solutions that can win wars while delivering compelling results to our shareholders.”
Earnings Impacts of Classified Program Losses and Other Items
During the fourth quarter of 2024, the company recognized losses associated with existing classified programs at its Aeronautics and Missiles and Fire Control (MFC) business segments.
The company’s Aeronautics business segment has an existing classified fixed-price incentive fee contract that involves highly complex design and systems integration. The program includes a base contract for the initial phase of the program and multiple options for additional phases. The company previously disclosed it continues to monitor the technical requirements and its performance, the remaining work and any future changes in scope or schedule, and estimated costs to complete the program, and it may have to record additional losses in future periods if further performance issues, increases in scope, or cost growth occur. As a result of performance trends experienced in the fourth quarter 2024 and in contemplation of near-term program milestones, the company performed a comprehensive review of the program requirements, technical complexities, schedule, and risks. Based on that review, the company has identified higher projected costs in engineering and integration activities that are necessary to achieve those forthcoming milestones and recognized losses across the program phases of $410 million in the fourth quarter of 2024. As of December 31, 2024, losses for the year were approximately $555 million, including the fourth quarter loss.
The company’s MFC business segment has an existing classified contract, which includes a cost-reimbursable base contract for the initial phase of the program and multiple fixed-price options for additional phases. The company previously disclosed the options may be exercised over the next several years and if performed expects they would each be at a loss. During the first quarter of 2024, the company concluded it was probable that the first option would be exercised and recognized a loss of approximately $100 million. During the fourth quarter of 2024, the company again assessed the likelihood that additional options may be exercised and now believe it is probable that all options will be exercised based on performance to date, future requirements of the program, discussions with the customer and suppliers, and anticipated customer funding, among other factors, resulting in the recognition of additional losses of approximately $1.3 billion, which is consistent with the amount the company previously disclosed. For the year ended Dec. 31, 2024, MFC recognized losses of $1.4 billion for this program, including the fourth quarter loss.
The table below provides supplemental information on the earnings and earnings per share impacts of these program losses:
(in millions, except per share data)
Quarters Ended Dec. 31,
Years Ended Dec. 31,
2024
2023
2024
2023
Aeronautics classified program losses
$ (410)
$ —
$ (555)
$ —
MFC classified program losses
(1,310)
(40)
(1,410)
(45)
Business segment operating profit
(1,720)
(40)
(1,965)
(45)
Unallocated other1
86
2
98
2
Consolidated operating profit
(1,634)
(38)
(1,867)
(43)
Income tax benefit2
343
8
392
9
Net earnings
$ (1,291)
$ (30)
$ (1,475)
$ (34)
Weighted average shares outstanding
237.0
246.1
239.2
251.2
Diluted earnings per share
$ (5.45)
$ (0.12)
$ (6.16)
$ (0.14)
1
Reflects the state income tax impact associated with Aeronautics and MFC classified program losses based on a blended state tax rate of 5%.
2
Calculated using the 21% federal statutory rate.
Summary Financial Results
The following table presents the company’s summary financial results.
(in millions, except per share data)
Quarters Ended Dec. 31,
Years Ended Dec. 31,
2024
2023
2024
2023
Net sales
$ 18,622
$ 18,874
$ 71,043
$ 67,571
Business segment operating profit1,2
$ 426
$ 2,042
$ 6,083
$ 7,389
Unallocated items
FAS/CAS pension operating adjustment
406
415
1,624
1,660
Impairment and severance charges3
—
(92)
(87)
(92)
Intangible asset amortization expense
(64)
(62)
(247)
(247)
Other, net
(72)
(10)
(360)
(203)
Total unallocated items
270
251
930
1,118
Consolidated operating profit
$ 696
$ 2,293
$ 7,013
$ 8,507
Net earnings
$ 527
$ 1,866
$ 5,336
$ 6,920
Diluted earnings per share
$ 2.22
$ 7.58
$ 22.31
$ 27.55
Cash from operations4
$ 1,023
$ 2,365
$ 6,972
$ 7,920
Capital expenditures
(582)
(704)
(1,685)
(1,691)
Free cash flow1,4
$ 441
$ 1,661
$ 5,287
$ 6,229
1
Business segment operating profit and free cash flow are non-GAAP measures. See the “Use of Non-GAAP Financial Measures” section of this news release for more information.
2
Business segment operating profit for the quarter and year ended Dec. 31, 2024 included losses of $1.7 billion ($1.3 billion, or $5.45 per share, after-tax) and $2.0 billion ($1.5 billion, or $6.16 per share, after-tax) at its Aeronautics and MFC business segments as a result of classified programs losses previously described.
3
Impairment and severance charges for the year ended Dec. 31, 2024 include $87 million ($69 million, or $0.29 per share, after-tax) trademark and fixed asset impairments as well as severance costs at the company’s RMS business segment.
4
Cash from operations for the quarter and year ended Dec. 31, 2024 reflects a pension contribution of $990 million. See the “Cash Flows and Capital Deployment Activities” section of this news release for more information.
2025 Financial Outlook
The following table and other sections of this news release contain forward-looking statements, which are based on the company’s current expectations. Actual results may differ materially from those projected. It is the company’s practice not to incorporate adjustments into its financial outlook for proposed or potential acquisitions, divestitures, ventures, pension risk transfer transactions or discretionary contributions, financing transactions, changes in law, or new accounting standards until such items have been consummated, enacted or adopted. For additional factors that may impact the company’s actual results, refer to the “Forward-Looking Statements” section in this news release.
(in millions, except per share data)
2024
As Reported
2024
As Adjusted1
2025 Outlook2
Net sales
$71,043
$71,208
~$73,750 – $74,750
Business segment operating profit1
$6,083
$7,893
~$8,100 – $8,200
Total FAS/CAS pension adjustment
$1,686
$1,686
~$1,125
Diluted earnings per share
$22.31
$27.99
~$27.00 – $27.30
Cash from operations
$6,972
$7,807
~$8,500 – $8,700
Capital expenditures
$1,685
$1,685
~$1,900
Free cash flow1
$5,287
$6,122
~$6,600 – $6,800
1
All 2024 As Adjusted amounts as well as business segment operating profit and free cash flow are non-GAAP measures. See the “Use of Non-GAAP Financial Measures” section of this news release for more information.
2
The company’s current 2025 financial outlook does not include any future gains or losses related to changes in valuations of the company’s net assets and liabilities for deferred compensation plans or early-stage company investments. The company’s financial outlook for 2025 assumes that fiscal year 2025 appropriations bills are adopted in a timely manner, the company’s programs remain funded and that the U.S. Government does not shutdown or continue to operate under a continuing resolution for the remainder of 2025.
Cash Flows and Capital Deployment Activities
The decrease in operating and free cash flows in the quarter and year ended Dec. 31, 2024 compared to the same period in 2023 were primarily due to a pension contribution of $990 million.
The company’s cash activities in the quarter and year ended 2024, included the following:
