Lockheed Martin reports $1.5 bn Q4 net profit on $15.9 bn net sales
29 January 2020
Lockheed Martin Corporation has reported fourth quarter 2019 net sales of $15.9 billion, compared to $14.4 billion in the fourth quarter of 2018. Net earnings in the fourth quarter of 2019 was $1.5 billion, or $5.29 per share, compared to $1.3 billion, or $4.39 per share, in the fourth quarter of 2018.
Cash from operations in the fourth quarter of 2019 was $1.5 billion, after discretionary pension contributions of $1.0 billion, compared to cash from operations of $2.2 billion in the fourth quarter of 2018.
Net sales in 2019 was $59.8 billion, compared to $53.8 billion in 2018. Net earnings in 2019 was $6.2 billion, or $21.95 per share, compared to $5.0 billion, or $17.59 per share, in 2018. Cash from operations in 2019 was $7.3 billion, after discretionary pension contributions of $1.0 billion, compared to cash from operations of $3.1 billion in 2018, after annual pension contributions of $5.0 billion.
"The corporation delivered outstanding performance throughout 2019, achieving exceptional sales growth, strong earnings, cash from operations, and a record backlog," said Lockheed Martin chairman, president and CEO Marillyn Hewson. "As we look ahead to 2020, we remain focused on providing innovative global solutions for our customers, investing for growth across our portfolio, and generating long-term value for our shareholders."
In the year ended 31 December 2018, the corporation recognized severance and restructuring charges totaling $96 million ($76 million, or $0.26 per share, after-tax) associated with planned workforce reductions and the consolidation of certain operations at the corporation's Rotary and Mission Systems business segment.
In the year ended 31 December 2019, the corporation recognised a previously deferred non-cash gain of $51 million ($38 million, or $0.13 per share, after-tax) related to properties sold in 2015 as a result of completing its remaining obligations.
In the quarter and year ended 31 December 2019, the corporation recognised a gain of $34 million (approximately $0 after-tax) for the sale of its Distributed Energy Solutions (DES) business, a commercial energy service provider that was part of its Missiles and Fire Control business segment.
US-Iran tensions have helped build momentum for defence purchases, benefiting Lockheed and other weapons makers. One business unit, Missiles and Fire Control, saw sales up 14 per cent in the quarter on higher volume for higher tactical and strike missiles.
Lokheed Martin said net sales and operating profit of the corporation's business segments exclude intersegment sales, cost of sales, and profit as these activities are eliminated in consolidation. Operating profit of the corporation's business segments includes the corporation's share of earnings or losses from equity method investees as the operating activities of the investees are closely aligned with the operations of its business segments.
Operating profit of the corporation's business segments also excludes the FAS/CAS operating adjustment described below, a portion of corporate costs not considered allowable or allocable to contracts with the US government under the applicable cost accounting standards or federal acquisition regulations (FAR), and other items not considered part of management's evaluation of segment operating performance.
Lokheed martin also raised its 2020 revenue outlook to a range of $62.75 billion to $64.25 billion, adding that its financial projections for 2020 does not include potential impacts to the corporation's programs, including the F-35 programme, resulting from US government actions related to Turkey. Currently, the corporation does not expect this event will have a material impact on its 2020 financial results, it added.