Lockheed Martin Corporation (LMT)
Description
Global aerospace and defense company engaged in research, development, manufacture, integration, and sustainment of advanced technology systems, products, and services for defense, aerospace, intelligence, homeland security, and information technology.
Historical Reports
Financial Information
- Report Date
- 2025-04-30
- Report Period
- Q1 2025
- Debt
- $20,304 million
- Debt History
- Shrinking by 4.9% from December 2024
- Debt Trend
- Decreasing
Profit Information
- Profit
- $1,712 million
- Profit History
- Growing by 10.9% from Q1 2024
- Profit Trend
- Increasing
Detailed Report
Lockheed Martin Corporation Q1 2025 Financial Report
Report Date: 2025-04-30
Period Covered: Quarterly period ended March 31, 2025
Form Type: 10-Q
1. Executive Summary
- Revenue: $17,963 M, up 4.5% vs. Q1 2024 ($17,195 M)
- Net Earnings: $1,712 M, up 10.9% vs. Q1 2024 ($1,545 M)
- EPS (diluted): $0.728 vs. $0.639
- Operating Profit: $2,372 M vs. $2,029 M (+16.9%)
- Debt (net): $20,304 M vs. $20,270 M at December 2024
- Cash & Equivalents: $1,803 M
- Free Cash Flow: $955 M
2. Profit & Debt Analysis
2.1 Profit Drivers & Trends
- Higher Production Volumes: F-35 deliveries (+$355 M), JASSM/LRASM missile ramp-up (+$370 M), Black Hawk/Sikorsky (+$145 M)
- Positive Profit-rate Adjustments: $480 M favorable booking-rate adjustments (space: $155 M; MFC: $130 M; RMS: $120 M; Aeronautics: $110 M)
- Segment Operating Margin: Improved across all reportable groups; consolidated margin rose to 13.2% from 11.8%.
- Tax Rate: Effective rate stable at 15.9%, benefitting from R&D credits and FDII deductions.
2.2 Debt & Liquidity
- Total Debt: Net long-term and current maturities $20.3 B (–4.9% long-term vs. prior year)
- Liquidity Facilities: $3 B revolving credit plus CP program; no draws outstanding.
- Cash Flow: Operating cash generation $1,409 M less capex $454 M yields free cash flow $955 M.
- Capital Deployment: $796 M dividends and $750 M share repurchases in Q1.
3. Segment Performance
| Segment | Revenue ($M) | Δ% | Op Profit ($M) | Δ% | Margin |
|---|---|---|---|---|---|
| Aeronautics | 7,057 | +3.1% | 720 | +6.1% | 10.2% |
| MFC | 3,373 | +12.7% | 465 | +49.5% | 13.8% |
| RMS | 4,328 | +5.9% | 521 | +21.2% | 12.0% |
| Space | 3,205 | –2.0% | 379 | +16.6% | 11.8% |
| Total | 17,963 | +4.5% | 2,085 | +19.5% | 11.6% |
4. Key Drivers & Risks
Pros:
- Strong global demand for F-35 and missile platforms
- Robust free cash generation enabling dividends and buybacks
- Continued positive backlog conversion ($173 B total)
Cons & Challenges:
- Fixed-price development programs carry execution risk (e.g., classified aeronautics and MFC reach-forward losses)
- Inflation and supply-chain constraints pressure margins on cost-reimbursable and fixed-price contracts
- Tariff and trade policy volatility may raise input costs near-term
- Pension funding and minimum-tax rules may elevate cash tax outflows
5. Outlook & Strategic Priorities
- Volume Growth: Scale F-35, JASSM/LRASM, Black Hawk, and ULA launch cadence
- Cost Discipline: Target overhead efficiencies and supply-chain resilience
- Technology Leadership: Invest in next-generation air dominance, space systems, and digital solutions
- Capital Efficiency: Maintain strong free-cash-flow return profile; opportunistic debt refinancing
Lockheed Martin remains well-positioned for sustained growth in Q2 2025 and beyond, balancing profitable backlog conversion with disciplined investment and shareholder returns.
Statistics Breakdown
• Segment Revenues Q1 2025 (M$): Aeronautics 7,057; MFC 3,373; RMS 4,328; Space 3,205.
• Contract Type: Fixed-price $10,755 M; Cost-reimbursable $7,208 M.
• Customer Mix: U.S. Government $12,949 M; International Govt. $4,922 M; Commercial ~$92 M.
• Geography: U.S. $13,041 M; Europe $1,968 M; Asia-Pacific $1,744 M; Middle East $704 M; Other $506 M.
• Backlog: $173 B total, $50 B in next 12 months, $30 B in 12–24 months
Company Direction Insights
Lockheed Martin’s trajectory in Q1 2025 underscores robust volume and margin expansion across core segments, supported by a healthy $173 B backlog. The company’s strong free-cash-flow profile and low leverage (net debt/EBITDA ~1.5×) afford continued returns to shareholders while funding strategic R&D. Execution risks persist in fixed-price development contracts and cost inflation, but disciplined contract management, supply-chain resilience measures, and tariff‐recovery actions mitigate headwinds. Key opportunities lie in advancing air-dominance systems (F-35/NGAD), missile growth (JASSM/LRASM), space launch, and next-gen digital solutions. Pension fund actions and global minimum-tax compliance will require nimble tax planning. Overall, LM’s diversified portfolio, technological leadership, and financial strength position it for sustainable long-term growth, albeit against the backdrop of geopolitical tensions and budgetary uncertainties.