Lockheed Martin on Tuesday posted net sales of over $14 billion for the second quarter of 2019, along with higher net earnings and cash from operations compared to the same period last year.
The U.S. defense giant reported $14.4 billion in sales, compared to $13.4 billion in the second quarter of 2018. Net earnings increased to $1.4 billion, or $5 per share, compared to $1.2 billion, or $4.05 per share last year. Cash from operations increased to $1.7 billion from negative $72 million in the same period of 2018 after pension contributions.
“The corporation achieved another quarter of strong operational and financial results across all four of our businesses, which allowed us to grow our backlog to a new record level and to increase our financial outlook for 2019,” Lockheed Martin CEO Marillyn Hewson said.
Backlog grew to a record $137 billion and 2019 outlook for all financial metrics was increased.
Driving the numbers were $5.5 billion in Aeronautics sales, an increase from $5.3 billion the previous year, and increased net sales in the Missile and Fire Control ($2.4 billion), Rotary and Mission Systems ($3.7 billion) and Space ($2.6 billion) segments.
Lockheed noted there was a risk of delays in Congressional approval for exports to Saudi Arabia, the United Arab Emirates and Turkey, or the suspension of the sale of F-35 fighter jets to Turkey, along with potential sanctions on Turkey or Saudi Arabia.
Net sales in the Aeronautics division were $5.55 billion, an increase of $229 million, or 4%, compared to the same period in 2018, primarily due to higher net sales of around $205 million in the F-35 program.
Operating profit in the segment was $592 million, an increase of $20 million, or 3%, from the same period last year. Profit increased $15 million due to increased recurring volume in the F-35 program, the company said.
Missiles and Fire Control
Missiles and Fire Control sales were $2.411 billion, an increase of $326 million, or 16%, primarily attributable to higher net sales in the tactical and strike missile programs and the sensors and global sustainment programs due to increased volume.
Operating profit in the division was $327 million, an increase of $48 million, or 17%, and driven by an increase of $35 million for sensors and global sustainment programs due to lower charges compared to the same period in 2018, and by higher volume.
Rotary and Mission Systems
Net sales in the Rotary and Mission Systems division were $3.768 billion, an increase of $202 million, or 6% from the same period in 2018. The increase was driven by higher sales of around $190 million for integrated warfare systems and sensors programs due to higher volume – primarily the Multi Mission Surface Combatant, Littoral Combat Ship, and Aegis Combat System programs – and about $95 million in various training and logistics solutions programs due to higher volume.
Sikorsky helicopter programs recored a $115 decrease in net sales due to lower volume in Black Hawk production and the combat rescue helicopter program and commercial aircraft services.
Rotary and Mission Systems’ operating profit was largely unchanged from 2018 – $347 million compared to $341 million.
Net sales for Space $2.698 billion, an increase of $272 million, or 11 percent, from the second quarter of 2018 and attributed primarily to higher net sales of approximately $170 million for government satellite programs (Next Generation Overhead Persistent Infrared, Global Positioning System III, and satellite services), and about $70 million for strategic and missile defense programs due to higher volume.
The divisions’ operating profit increased $14 million, or 5%, to $288 million, driven by $35 million in commercial satellite programs and $30 million for government satellite programs.