Lockheed Martin Reports Third Quarter 2023 Financial Results
BETHESDA, Md., Oct. 17, 2023
-- Net sales of $16.9 billion, an increase of 2% year-over-year
-- Net earnings of $1.7 billion, or $6.73 per share
-- Cash from operations of $2.9 billion and free cash flow of $2.5 billion
-- $2.5 billion of cash returned to shareholders through dividends and share
repurchases
-- Increased share repurchase authority by $6.0 billion to a total
authorization of $13.0 billion
-- Increased quarterly dividend to $3.15 per share
-- Reaffirms 2023 financial outlook
Lockheed Martin Corporation (NYSE: LMT) today reported third quarter 2023 net sales of $16.9 billion, compared to $16.6 billion in the third quarter of 2022. Net earnings in the third quarter of 2023 were $1.7 billion, or $6.73 per share, compared to $1.8 billion, or $6.71 per share, in the third quarter of 2022. Cash from operations was $2.9 billion in the third quarter of 2023, compared to $3.1 billion in the third quarter of 2022. Free cash flow was $2.5 billion in the third quarter of 2023, compared to $2.7 billion in the third quarter of 2022.
“Our third quarter results were at or above our expectations across the board, generating $2.5 billion of free cash flow, with nearly 100% returned to shareholders through dividends and share repurchases.” said Lockheed Martin Chairman, President and CEO Jim Taiclet. “Our backlog remains robust at $156 billion as both domestic and international orders were strong. Moreover, our 21st Century Security strategy is resulting in new business successes, including the award of the transformational AIR6500 integrated air and missile defense program by the Australian Defence Force, which will serve as a blueprint for future joint all-domain operations worldwide.
Looking ahead, we’ll continue to pursue our strategy of building capacity, efficiency and resilience into our production operations, driving advanced digital technologies to enhance integrated deterrence through collaboration with our customers and tech and aerospace industry partners, and expanding our international business and operations. This strategy is designed to drive growth in our traditional platforms and systems, augmented with digital service revenues over time, which in turn will support our dynamic capital allocation process to reward shareholders.”
Adjusted earnings before income taxes, net earnings and diluted EPS
The table below shows the impact to earnings before income taxes, net earnings and diluted earnings per share (EPS) for certain non-operational items:
(in millions,
except per share
data) Quarters Ended
Sept. 24, Sept. 25,
2023 2022
-----------------------------------
Earnings Earnings
Before Before
Income Net Diluted Income Net Diluted
Taxes Earnings EPS Taxes Earnings EPS
---------- ---------- ----------- ---------- ---------- -----------
As Reported
(GAAP) $ 1,953 $ 1,684 $ 6.73 $ 2,099 $ 1,778 $ 6.71
Mark-to-market
investment
losses(1) 14 11 0.04 59 45 0.16
As Adjusted
(Non-GAAP)(2) $ 1,967 $ 1,695 $ 6.77 $ 2,158 $ 1,823 $ 6.87
========== ========== =========== ========== ========== ===========
1 Includes changes in valuations of the company's net assets and liabilities for
deferred compensation plans and early-stage company investments.
2 See the "Use of Non-GAAP Financial Measures" section of this news release for
more information.
Summary Financial Results
The following table presents the company’s summary financial results.
(in millions,
except per
share data) Quarters Ended Nine Months Ended
---------------------------------------- -------------------------------------
Sept. 24, Sept. 25, Sept. 24, Sept. 25,
2023 2022 2023 2022
------------------- ------------------- ------------------ -----------------
Net sales $ 16,878 $ 16,583 $ 48,697 $ 46,993
=================== =================== ================== =================
Business
segment
operating
profit(1,2) $ 1,810 $ 1,918 $ 5,347 $ 5,399
Unallocated
items
FAS/CAS
operating
adjustment 414 430 1,245 1,281
Intangible
asset
amortization
expense(2) (61) (62) (185) (186)
Other, net(3) (121) (127) (193) (439)
------------------- ------------------- ------------------ -----------------
Total
unallocated
items 232 241 867 656
------------------- ------------------- ------------------ -----------------
Consolidated
operating
profit $ 2,042 $ 2,159 $ 6,214 $ 6,055
=================== =================== ================== =================
Net
earnings(3,4) $ 1,684 $ 1,778 $ 5,054 $ 3,820
=================== =================== ================== =================
Diluted
earnings per
share(3,4) $ 6.73 $ 6.71 $ 19.97 $ 14.31
=================== =================== ================== =================
Cash from
operations(5) $ 2,891 $ 3,133 $ 5,555 $ 5,874
Capital
expenditures (364) (405) (987) (977)
------------------- ------------------- ------------------ -----------------
Free cash
flow(1,5) $ 2,527 $ 2,728 $ 4,568 $ 4,897
=================== =================== ================== =================
1 Business segment operating profit and free cash flow are non-GAAP measures. See
the "Use of Non-GAAP Financial Measures" section of this news release for more
information.
2 Effective Jan. 1, 2023, the company reclassified intangible asset amortization
expense out of the business segment operating profit and into the unallocated
items line item to better align with how management views and manages the
business. The 2022 amounts reflect the impact of this change.
3 Other, net for the quarter ended Sept. 24, 2023 included insignificant net
losses due to changes in the fair value of net assets and liabilities for
deferred compensation plans, compared to net losses of $33 million ($25 million,
or $0.09 per share, after-tax) for the quarter ended Sept. 25, 2022.
4 Net earnings for the quarters ended Sept. 24, 2023 and Sept. 25, 2022 included
net losses of $13 million ($10 million, or $0.04 per share, after-tax) and $26
million ($20 million, or $0.07 per share, after-tax) due to changes in the fair
value of early-stage company investments.
5 See the "Cash Flows and Capital Deployment Activities" section of this news
release for more information.
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2023 Financial Outlook
The following table and other sections of this news release contain forward-looking statements, which are based on the company’s current expectations. Actual results may differ materially from those projected. It is the company’s practice not to incorporate adjustments into its financial outlook for proposed acquisitions, divestitures, ventures, pension risk transfer transactions, financing transactions, changes in law, or new accounting standards until such items have been consummated, enacted or adopted. For additional factors that may impact the company’s actual results, refer to the “Forward-Looking Statements” section in this news release.
(in millions, except per share
data) Current 2023 Outlook(1)
-------------------------------
Net sales $66,250 - $66,750
Business segment operating
profit(2) $7,325 - $7,375
Total FAS/CAS pension adjustment(3) $2,100
Diluted earnings per share $27.00 - $27.20
Cash from operations $8,150
Capital expenditures $(1,950)
-------------------------------
Free cash flow(2) >=$6,200
-------------------------------
1 The company's current 2023 financial outlook does not include any
future gains or losses related to changes in valuations of the
company's net assets and liabilities for deferred compensation