Core Viewpoint - Lockheed Martin's recent earnings report shows a mixed performance, with adjusted earnings beating estimates but a decline in GAAP earnings, leading to a downward revision in future EPS guidance. Financial Performance - Adjusted earnings for Q2 2025 were $7.29 per share, exceeding the Zacks Consensus Estimate of $6.49 by 12.3% and up 2.5% from $7.11 in the prior year [2] - GAAP earnings were reported at $1.46 per share, significantly lower than $6.85 in the same quarter last year [2] - Net sales reached $18.16 billion, missing the consensus estimate of $18.56 billion by 2.2%, but slightly up 0.2% from $18.12 billion year-over-year [4] Operational Highlights - The decline in earnings was attributed to lower consolidated operating profit compared to the previous year [3] - Backlog as of June 29, 2025, was $166.53 billion, down from $172.97 billion as of March 30, 2024, and below the projected $174.48 billion [5] - Aeronautics segment sales increased 2% to $7.42 billion, driven by the F-35 program, but incurred an operating loss of $98 million [6] - Missiles and Fire Control segment saw a 10.7% increase in sales to $3.43 billion, with operating profit rising 6.4% to $479 million [7] - Space segment revenues improved 3.5% to $3.31 billion, with operating profit increasing 4.6% to $362 million [8] - Rotary and Mission Systems segment revenues declined 12.2% to $4 billion, resulting in an operating loss of $172 million [9][10] Financial Condition - Cash and cash equivalents totaled $1.29 billion, down from $2.48 billion at the end of 2024 [11] - Cash from operating activities was $1.61 billion, compared to $3.51 billion a year ago [11] - Long-term debt decreased to $18.52 billion from $19.63 billion as of December 31, 2024 [11] Guidance and Estimates - The company expects 2025 sales in the range of $73.75-$74.75 billion, with a consensus estimate of $74.32 billion [12] - Adjusted EPS guidance was lowered to $21.70-$22.00 from the previous $27.00-$27.30, with the consensus estimate at $27.21 [13] - Free cash flow is expected to be in the range of $6.60-$6.80 billion [14] Market Outlook - Estimates for Lockheed Martin have been trending downward since the earnings release, indicating a potential in-line return in the coming months [15][17] - The company currently holds a Zacks Rank 3 (Hold) [17] Industry Comparison - Lockheed Martin is part of the Zacks Aerospace - Defense industry, where GE Aerospace reported a 23.4% year-over-year revenue increase to $10.15 billion [19] - GE's EPS for the same period was $1.66, up from $1.20 a year ago, and it holds a Zacks Rank 1 (Strong Buy) [20]

Core Insights - Lockheed Martin Corporation (LMT) reported second-quarter 2025 adjusted earnings of $7.29 per share, exceeding the Zacks Consensus Estimate of $6.49 by 12.3% and showing a 2.5% increase from the previous year's figure of $7.11 [1][2][8] - The company’s GAAP earnings were reported at $1.46 per share, significantly lower than the prior year's $6.85 [1] Financial Performance - Net sales for the quarter were $18.16 billion, missing the Zacks Consensus Estimate of $18.56 billion by 2.2%, but reflecting a slight increase of 0.2% from $18.12 billion in the same quarter last year [3] - The year-over-year sales growth was primarily driven by increases in various business segments, except for Rotary and Mission Systems [3] Backlog and Segment Performance - As of June 29, 2025, LMT's backlog was $166.53 billion, down from $172.97 billion as of March 30, 2024, and below the projected $174.48 billion [4] - The Aeronautics segment accounted for $52.17 billion of the backlog, while Missiles and Fire Control contributed $40.25 billion, Rotary and Mission Systems $38.58 billion, and Space $35.53 billion [4] Segment Highlights - **Aeronautics**: Sales increased by 2% year over year to $7.42 billion, driven by the F-35 program, but the segment incurred an operating loss of $98 million compared to a profit of $751 million in the previous year [5] - **Missiles and Fire Control**: Sales rose 10.7% year over year to $3.43 billion, with operating profit increasing 6.4% to $479 million, although the operating margin contracted by 50 basis points to 14% [6] - **Space**: Revenue improved by 3.5% year over year to $3.31 billion, with operating profit rising 4.6% to $362 million and an operating margin expansion of 10 basis points to 10.9% [7] - **Rotary and Mission Systems**: Revenues declined 12.2% year over year to $4 billion, with an operating loss of $172 million compared to a profit of $495 million in the prior year [9][10] Financial Condition - Cash and cash equivalents totaled $1.29 billion as of June 29, 2025, down from $2.48 billion at the end of 2024, with cash from operating activities amounting to $1.61 billion compared to $3.51 billion a year ago [11] - Long-term debt decreased to $18.52 billion from $19.63 billion as of December 31, 2024 [11] 2025 Guidance - Lockheed Martin updated its 2025 guidance, expecting sales in the range of $73.75-$74.75 billion, with the Zacks Consensus Estimate at $74.32 billion [12] - The adjusted EPS guidance was lowered to $21.70-$22.00 from the previous $27.00-$27.30, with the consensus estimate at $27.21 per share [13] - The company continues to expect cash from operations between $8.50-$8.70 billion and capital expenditure of approximately $1.90 billion [13][14]

Core Insights - Lockheed Martin Corporation (LMT) reported first-quarter 2025 earnings of $7.28 per share, exceeding the Zacks Consensus Estimate of $6.34 by 14.8% and reflecting a 15% increase from the previous year's $6.33 per share [1] - The company's net sales reached $17.96 billion, surpassing the Zacks Consensus Estimate of $17.76 billion by 1.1% and showing a 4.5% year-over-year growth from $17.20 billion [2] Operational Highlights - The year-over-year sales growth was driven by increased performance across most business segments, with the exception of Space [2] - LMT's backlog as of March 30, 2025, was $172.97 billion, down from $176.04 billion at the end of 2024, and below the projected $178.46 billion [3] Segment Performance - **Aeronautics**: Sales increased 3.1% year over year to $7.06 billion, attributed to higher sales volume from the F-35 program. Operating profit rose 6% to $720 million, with an operating margin of 10.2% [4] - **Missiles and Fire Control**: Sales improved 12.7% year over year to $3.37 billion, driven by tactical and strike missile programs. Operating profit surged 49.5% to $465 million, with an operating margin of 13.8% [4][5] - **Space**: Sales decreased 2% year over year to $3.21 billion due to lower sales from national security space programs. Operating profit increased 16.6% to $379 million, with an operating margin of 11.8% [5] - **Rotary and Mission Systems**: Revenues rose 5.9% to $4.33 billion, primarily from integrated warfare systems and Sikorsky helicopter programs. Operating profit increased 21.2% to $521 million, with an operating margin of 12% [6] Financial Condition - Cash and cash equivalents totaled $1.80 billion as of March 30, 2025, down from $2.48 billion at the end of 2024. Cash from operating activities was $1.41 billion, compared to $1.64 billion a year ago [8] - Long-term debt decreased to $18.66 billion from $19.63 billion as of December 31, 2024 [8] 2025 Guidance - Lockheed Martin reiterated its 2025 sales guidance, expecting to generate between $73.75 billion and $74.75 billion, with the Zacks Consensus Estimate at $74.23 billion [9] - The company projects adjusted earnings per share in the range of $27.00 to $27.30, with the consensus estimate at $27.17 per share [9] - Expected cash from operations is projected to be between $8.50 billion and $8.70 billion, with capital expenditure around $1.90 billion and free cash flow between $6.60 billion and $6.80 billion [10]