Lockheed Martin (LMT) reported disappointing Q4 earnings for 2024, with revenue falling slightly short of expectations. The company posted a revenue of $18.62 billion, below the estimated $18.90 billion, marking a decline of 1.3% compared to the same quarter last year. Earnings per share (EPS) were also significantly lower at $2.22, well below the estimated $6.63, primarily due to losses from classified programs. Free cash flow dropped sharply by 74% year-over-year to $441 million, far below the expected $1.4 billion.
For 2025, Lockheed Martin expects revenue to fall between $73.75 billion and $74.75 billion, just shy of the $74.02 billion estimate. EPS is projected to be between $27.00 and $27.30, again lower than the $27.97 estimate. However, the company expects a recovery in free cash flow, with guidance ranging from $6.6 billion to $6.8 billion.
Looking at the company’s key segments for Q4:
Aeronautics saw a 5% YoY increase in revenue to $8.01 billion, driven by higher production and sustainment volumes of the F-35. However, operating profit dropped by 43% to $434 million due to losses from classified programs.
Missiles and Fire Control experienced an 8% increase in revenue to $3.41 billion but reported a significant operating loss of $804 million due to impacts from $1.3 billion in classified program losses.
Rotary and Mission Systems had a revenue decline of 10% YoY to $4.26 billion. While operating profit remained flat at $513 million, sales were hurt by lower demand for the Seahawk and Combat Rescue Helicopter programs, though radar and C6ISR programs saw higher volumes.
Space also struggled, with a 13% revenue decline to $2.94 billion and a drop in operating profit by 8% to $283 million. The decline was driven by reduced volumes in Next Gen OPIR and classified programs.
For the full year of 2024, Lockheed Martin posted a revenue increase of 5%, reaching $71.0 billion, just below the expected $71.21 billion. EPS dropped by 19% to $22.31, falling short of the $27.99 estimate, while free cash flow decreased by 15% to $5.3 billion. Despite these declines, the company ended the year with a record backlog of $176.0 billion, signaling strong future demand.
CEO Jim Taiclet emphasized the strong demand and the company’s commitment to advancing air power solutions and integrating next-gen technology. However, he acknowledged the significant impact of classified program losses on their financial results.
In terms of shareholder returns, Lockheed Martin returned $6.8 billion in 2024 through dividends and stock buybacks. Pension contributions of $990 million also impacted free cash flow.
