Lockheed Martin (LMT) Q4 2024 earnings summary

Executive summary

• Achieved 5% year-over-year sales growth in 2024, reaching $71.0B, with record backlog of $176.0B, reflecting strong global demand and robust book-to-bill ratios across all business areas.

• Net earnings for 2024 were $5.3B ($22.31/share), down from $6.9B ($27.55/share) in 2023, impacted by $2.0B in classified program losses.

• Implemented de-risking actions on classified programs, recording $1.8B–$2.0B in net charges to reduce future financial risk.

• Returned $6.8B to shareholders through dividends and share repurchases, including $3.7B in buybacks and $3.1B in dividends.

• Invested over $3.3B in R&D and capital to support advanced technology and digital transformation initiatives.

Financial highlights

• 2024 sales reached $71.0B–$71.2B, up 5% year-over-year, driven by improved backlog conversion and throughput.

• Adjusted segment operating profit was $7.9B, with adjusted segment margins at 11.1% and adjusted EPS at $27.99.

• Generated $5.3B–$6.1B in free cash flow, including pension pre-funding, and returned $6.8B to shareholders.

• Q4 sales were $18.6B–$18.8B, slightly down year-over-year due to one fewer week, with Q4 adjusted free cash flow at $1.3B.

• Book-to-bill ratio for the year was 1.2x, with $29B in Q4 orders and strong Aeronautics performance.

Outlook and guidance

• 2025 sales expected at $73.75B–$74.75B (+4%–5%), with segment operating profit of $8.1B–$8.2B (11.0% margin).

• 2025 adjusted EPS guidance: $27.00–$27.30; free cash flow: $6.6B–$6.8B; cash from operations: $8.5B–$8.7B.

• Segment guidance: Aeronautics $29.3B–$29.7B, Missiles & Fire Control $13.6B–$13.9B, RMS $18.1B–$18.3B, Space $12.75B–$12.85B.

• Free cash flow expected to grow 9% at the midpoint, with double-digit growth in free cash flow per share despite pension headwinds.

• 2025 guidance assumes timely passage of appropriations and no government shutdown.