Lockheed Martin held its Q3 2024 earnings call on October 22, 2024, at 11:00 a.m. ET to discuss the financial results for the period ending September 30, 2024. The conference call was led by Maria Ricciardone, Vice President, Treasurer, and Investor Relations, with participation from Chairman, President, and CEO Jim Taiclet, and CFO Jay Malave.
The demand for Lockheed Martin’s systems and services continued to be strong across all business sectors, with a record backlog exceeding $165 billion due to robust orders for precision and air defense munitions. This quarter saw a 20-point increase in segment operating margins, particularly in Missiles and Fire Control, which boosted production volumes. Free cash flow reached $2.1 billion, prompting the board to increase the quarterly dividend by 5% and extend share repurchase authorizations.
Lockheed Martin delivered 48 F-35 aircraft during the quarter, with a projection to deliver between 90 and 110 aircraft within the year. The F-35 fleet is expected to become a crucial element in the defense apparatus of the U.S. and allied nations, with significant expansions in Europe and new commitments from countries such as Greece and Poland.
To enhance capabilities, Lockheed Martin is heavily investing in autonomy, AI, and other digital technologies. Successful demonstrations of autonomous systems have taken place, showcasing the company’s expertise in using AI for safer military operations. The collaboration with the U.S. Air Force Test Pilot School demonstrated adaptive technology in real-time flight control algorithms, aiming for significant cost and time savings.
In efforts to strengthen the defense supply chain, Lockheed Martin has partnered with General Dynamics to produce solid rocket motors, starting with GMLRS rockets in 2025. This agreement aims to enhance industry resilience and production agility.
Lockheed Martin is actively expanding its international collaborations to build indigenous military capabilities in nations like Australia, Germany, Poland, and India. Negotiations concerning the 2024 U.S. defense budget continue, with assurance of ongoing operations through a continuing resolution in effect until December 20, 2024.
Financially, sales increased to $17.1 billion, representing a 1% year-over-year rise. Segment operating profit grew by 3%, with a net profit adjustment surpassing prior year levels. Earnings per share increased by 1% to $6.80.
The company achieved significant order intake during the quarter, bringing its backlog to over $165 billion, primarily driven by missile orders. Lockheed Martin continues leveraging cash flow to fund research and development while returning $1.7 billion to shareholders through share repurchases and dividends.
Each business segment contributed to these results. Aeronautics experienced a slight decline in sales, offset by advances in C-130 and F-16 programs. Missiles and Fire Control saw an 8% increase in sales due to ramped production in missile systems, and Rotary and Mission Systems achieved a 6% sales growth, fueled by demand in radar programs and various Sikorsky aircraft. In the Space segment, Lockheed Martin secured key contracts to supply instruments and systems to NOAA and the U.S. Navy, despite a minor sales decrease.
Looking ahead to 2024, Lockheed Martin predicts slightly higher sales, operating profits, and earnings per share. The company’s confidence in future performance is supported by a strong backlog and continuous investments in operational efficiency and technology innovation.
During the earnings call, analysts participated in a question-and-answer session, further exploring aspects of Lockheed Martin’s strategic initiatives and financial outlook.
