Defense contractors are in focus lately and Lockheed Martin (NYSE: LMT) is the first to report third-quarter earnings since recently. In the three months that ended Sept. 24, 2023, net sales increased nearly two percent to $16.9 billion compared to the third quarter in 2022.
Lockheed said Tuesday its net earnings reached $1.68 billion. The total backlog climbed to $156 billion as of September 2023 from $149.99 billion in December 2022. Orders in every business segment, except for aeronautics, received increased orders.
“Our third quarter results were at or above our expectations across the board, generating $2.5 billion of free cash flow, with nearly 100 percent returned to shareholders through dividends and share repurchases,” said Jim Taiclet, chairman, president and CEO of Lockheed.
The previous Wash100 awardee also highlighted new business successes from Lockheed’s 21st Century Security designed to support the Department of Defense’s strategy of integrated deterrents.
Lockheed’s missiles and fire control segment posted net sales of $2.9 billion, a hike from previous year’s $2.8 billion result. In addition, the rotary and mission systems and space businesses reported increases in net sales to $4.1 billion and $3.1 billion, respectively.
According to Lockheed Chief Financial Officer Jay Malave, dividend increases and share repurchases are key parts of the total shareholder strategy. On a year-to-date basis, the global security and aerospace company returned almost $5.3 of free cash flow to shareholders. In the third quarter, the board extended Lockheed’s dividend growth streak to 21 consecutive years by approving a 5 percent increase to the quarterly dividend. It also authorized the repurchase of $6 billion in additional shares.
Taiclet said that given the current status of the 2024 U.S. defense budget, global geopolitical tensions, and the macroeconomic environment, Lockheed will provide its expectations and financial outlook for 2024 in January next year during the presentation of the full-year 2023 results.
