Lockheed Martin Corporation
CEO : Mr. James D. Taiclet Jr.
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | 7.1% YoY | -13.0% | -0.8% | 2023-01-24 |
Jim Taiclet says,
Financials and Outlook
- Lockheed Martin achieved full year sales of $66 billion, segment operating profit of $7.2 billion and earnings per share of $21.66 in 2022.
- Free cash flow for the year of $6.1 billion came in above prior expectations while backlog for the year increased to $150 billion, driven by all-time record orders for Lockheed Martin.
- Lockheed Martin delivered approximately $11 billion to shareholders in 2022 via share repurchases of $7.9 billion and dividends of $3 billion. The company expects to complete the remaining repurchase authorization of $10 billion over the next few years.
- The FY ’23 Omnibus spending bill appropriated $858 billion for National Defense, including $817 billion for the DoD-based budget, reflecting approximately 10% growth year-over-year for both national defense and the DoD-based budget.
- Lockheed Martin expects 2023 sales to be at the same level as discussed in October and a return to sustained top line growth in 2024 and beyond as headwinds diminish in the program mix, the supply chain continues to recover and signature programs grow.
Programs of Record
- The F-35 definitization of Lots 15 to 17 included the first F-35 aircraft to be produced for Belgium, Finland, Poland, and Germany, the ninth foreign military sales country, officially became an F-35 operator. Canada also selected the F-35 to replace its aging fighter fleet.
- The U.S. Navy authorized the CH-53K King Stallion heavy-lift helicopter to enter full rate production and then its deployment phase.
- Lockheed Martin built Orion exploration-class spacecraft launched on NASA’s ARTEMIS 1 and completed a 25-day flight test, slashing down off the coast of California.
- Sikorsky’s Future Vertical Lift initiative called the Future Attack Reconnaissance Aircraft, or FARA, is currently expected to be awarded in 2025.
Hypersonics and Classified Programs
- In December, Lockheed Martin Missiles and Fire Control and the U.S. Air Force successfully conducted a hypersonic-boosted flight test of the Air-Launched Rapid Response Weapon.
- Lockheed Martin achieved successful milestones across multiple business areas in 2022 and grew 5% year-over-year in classified programs, expecting growth to outpace the rest of the portfolio over the next several years.
New Awards and Future Growth
- Lockheed Martin’s Next-Generation Interceptor, or NGI, continues to make progress, with the first NGI forecast for delivery in 2027.
- Sikorsky remains one of two competitors for the Future Attack Reconnaissance Aircraft, or FARA, which is currently expected to be awarded in 2025.
- Lockheed Martin expanded strategic agreements with IBM’s Red Hat and Microsoft to advance artificial intelligence innovation on Lockheed Martin military platforms, ushering in a new era of cloud opportunities for the industry.
Jay Malave says,
Consolidated 2022 Financial Results
- Sales growth of 7% YoY in Q4
- Segment operating profit, earnings per share, and free cash flow exceeded expectations
- Record orders in 2022, resulting in 11% growth to an ending backlog of $150 billion
Segment Results
- Aeronautics segment operating profit increased 2% YoY
- Missiles and Fire Control segment sales decreased 3% YoY
- Rotary and Mission Systems segment sales decreased 4% YoY
- Space segment sales decreased 2% YoY
2023 Financial Outlook
- Sales expected to be in the range of $65 billion to $66 billion
- Segment operating margins estimated at 11.1%
- Earnings per share expected to be between $26.60 and $26.90
- Free cash flow estimate for 2023 is greater than or equal to $6.2 billion
- Share repurchase guide of another $4 billion
Overall Assessment
- Strong finish to 2022, well-positioned for long-term growth
- Significant increase in cash returns to shareholders through share repurchases
- Investments for growth, value, and efficiency are aligned with Lockheed Martin’s strategy for technology advancement
Q & A sessions,
Expected Impact on LMT Stock Movement
- Continued growth in four pillars, particularly in F-35 sustainment and F-16 production
- Gradual improvement in supply chain and internal operations in MFC, with stronger growth in 2024
- Double deliveries in CH-53 in 2024 versus 2023 in RMS, with some Black Hawk growth expected as well
- Inflation pressure on new proposals, ongoing dialogues with customers and suppliers to accommodate both requirements
- 2022 sales exceeded expectations, strong coordination with supplier partners, and record orders resulting in 11% growth in ending backlog
- 2023 sales to be slightly below 2022, with Q1 expected to be the lowest quarter and segment operating profit normalized for intangible asset amortization to improve from 2022
- EPS reduction primarily driven by lower segment operating profit in FAS/CAS income, partially offset by lower share count
- Free cash flow estimate for 2023 is greater than or equal to $6.2 billion, with continued enactment of R&D tax capitalization and $4 billion share repurchase guide
No bad stock 