Yahoo Finance Lockheed Martin Corp (LMT) Q1 2024 Earnings Call Transcript Highlights: Strategic Insights and ...
Revenue: $17.2 billion, a 14% increase year-over-year.
Backlog: Robust at $159 billion, aligning with customer missions and priorities.
Segment Operating Profit: $1.7 billion, up 4% year-over-year.
GAAP Earnings Per Share (EPS): $6.39, down 3% year-over-year.
Free Cash Flow: $1.3 billion after $360 million in R&D and $380 million in capital expenditures.
Book-to-Bill Ratio: Just below 1, with Space segment at 1.8.
Dividends and Share Repurchases: Returned $780 million through dividends and $1 billion in share repurchases.
Release Date: April 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss the current status and expectations for the F-35 program, particularly with the TR-3 updates? A: (James D. Taiclet, Chairman, President & CEO) The F-35 program is undergoing concurrent development, production, and sustainment enhancements. The TR-3 update, which involves significant software and hardware integration, has experienced delays. However, Lockheed Martin is focused on delivering combat training-capable aircraft by Q3 of this year, with a fully combat-capable version expected in 2025. The company remains committed to maintaining production rates and meeting delivery targets despite these challenges.
Q: How do recent developments like the '24 budget approval, NGI win, and potential large supplemental impact Lockheed Martin's revenue guidance for this year and growth expectations for 2025? A: (Jay Malave, CFO) The solid start in Q1, along with the approved budget and NGI win, positions Lockheed Martin well within the projected revenue guidance for 2024 and strengthens confidence in continued growth into 2025. The company anticipates maintaining or possibly exceeding the upper end of its revenue guidance based on current and expected developments.
Q: With the cancellation of the FARA program, what is the outlook for Lockheed Martin's vertical lift business, particularly concerning Sikorsky? A: (James D. Taiclet, Chairman, President & CEO) Despite the FARA cancellation, Lockheed Martin sees a stable future for Sikorsky, supported by strong programs like the CH-53K. The company is focusing on enhancing Black Hawk's capabilities and integrating advanced technologies to maintain its relevance and expand its mission capabilities, ensuring long-term stability and potential growth in the vertical lift sector.
Q: What are the expectations around the next-gen Interceptor (NGI) contract in terms of execution and potential financial impacts? A: (James D. Taiclet, Chairman, President & CEO) Lockheed Martin secured the NGI contract ahead of schedule, leveraging its digital transformation strategy to propose a cost-effective and timely solution. The company is confident in its pricing strategy and the contract's alignment with technological capabilities, expecting the NGI program to proceed without requiring aggressive cost-cutting measures.
Q: Can you provide insights into the financial and operational strategies for dealing with the classified program at Missiles and Fire Control that has been experiencing losses? A: (Jay Malave, CFO) The classified program is expected to continue incurring losses in the near term, with a potential total additional loss exceeding $1 billion. However, the long-term outlook remains positive, with expectations of profitability by 2028. Lockheed Martin is focused on aligning technical milestones and customer engagements to manage the program's financial impact effectively.
Q: How does the C2BMC contract align with Lockheed Martin's broader strategy for mission-centric programs and integration across platforms? A: (James D. Taiclet, Chairman, President & CEO) The C2BMC program exemplifies Lockheed Martin's strategy to integrate mission-centric approaches across its platforms, enhancing system connectivity and data integration to support comprehensive defense capabilities. This approach aligns with the company's focus on developing interconnected systems that support a wide range of defense missions and operational needs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
