Lockheed Martin (LMT) Q3 2024 earnings summary

Executive summary

• Net sales for Q3 2024 rose 1% year-over-year to $17.1 billion, with nine-month sales at $52.4 billion, up 8% year-over-year; net earnings for the nine months were $4.8 billion, and EPS was $20.05.

• Free cash flow reached $2.1 billion in Q3 and $4.8 billion for the nine months, supporting a 5% dividend increase and continued share repurchases.

• Record backlog exceeded $165.7 billion, with 35% expected to convert to revenue in the next 12 months; 48 F-35 deliveries in Q3 and increased missile production.

• Investments continued in autonomy, AI, digital technologies, and international partnerships, including new F-35 customers and sustainment operations in India.

• 2024 financial outlook for sales, segment operating profit, EPS, and free cash flow was raised, positioning for robust year-end and growth into 2025.

Financial highlights

• Q3 2024 sales were $17.1 billion, up 1% year-over-year; nine-month product sales rose 9% to $43.8 billion, and service sales increased 3% to $8.6 billion.

• Segment operating profit for Q3 was $1.9 billion, with a 10.9% segment operating margin; nine-month operating profit was $6.3 billion.

• GAAP EPS for Q3 was $6.80, and for nine months was $20.05; adjusted Q3 EPS was $6.84.

• Free cash flow for Q3 was $2.1 billion; year-to-date free cash flow was $4.8 billion.

• Returned $1.7 billion to shareholders in Q3 via dividends and share repurchases; nine-month repurchases totaled $2.7 billion.

Outlook and guidance

• 2024 sales outlook raised to $71.25 billion, segment operating profit to $7.475 billion, EPS to $26.65, and free cash flow to $6.2 billion.

• F-35 deliveries projected between 90 and 110 aircraft in 2024, with resumed deliveries in Q3 after a pause in the first half.

• Multi-year framework targets low single-digit CAGR for sales and free cash flow through 2027, with potential for mid-single-digit growth as supply chain and production improve.

• Share repurchase target for 2024 is $3.7 billion, slightly reduced due to capital redeployment.

• Outlook assumes F-35 Lots 18-19 contract authorization in Q4 2024; delays could materially impact results.