NYSE:LMT
LOCKHEED MARTIN CORP
A dominant US defense contractor delivering critical aerospace, defense, and space technology solutions to military and government customers worldwide.
Key Metrics
Investment Thesis
Bull Case
Lockheed Martin offers compelling value for long-term investors seeking exposure to the growing global defense spending trend and US aerospace dominance. The company's diversified portfolio across multiple high-margin segments provides stability, while its consistent ability to return capital through dividends and share repurchases supports shareholder returns even during periods of margin compression.
Bear Case
The stock faces headwinds from elevated debt levels totaling $20.53B in long-term obligations and a significant accumulated other comprehensive loss of -$7.54B that weighs on the balance sheet. Additionally, recent profitability contraction suggests potential pricing pressure or cost inflation within its massive supply chain, which could persist if defense contracts do not see corresponding price adjustments.
About LOCKHEED MARTIN CORP
Lockheed Martin is a premier global aerospace, defense, information systems, and space company serving military, intelligence, civil aviation, and commercial markets. Key products include the F-35 Lightning II fighter jet, missile defense systems like THAAD, C-130 Hercules transport aircraft, and satellite communications solutions for government and commercial entities.
Analysis
Management Discussion
Management delivered strong operational results with revenue growing from $65.98B in 2022 to $75.05B in 2025, though net income moderated slightly to $5.02B from a peak of $6.92B in 2023. Despite a decline in net profit margins driven by elevated cost of revenue and operating expenses, the company maintained robust cash flow from operations of $8.56B while returning over $6B to shareholders via dividends and buybacks.
Industry Overview
The global aerospace and defense industry is characterized by high barriers to entry, long product life cycles, and significant dependence on government procurement budgets. Companies in this sector benefit from steady demand driven by geopolitical tensions but must navigate complex regulatory environments and the constant threat of budgetary austerity.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $65.98B | $67.57B | $71.04B | $75.05B |
| Cost of Revenue | $57.70B | $59.09B | $64.11B | $67.43B |
| Gross Profit | $8.29B | $8.48B | $6.93B | $7.62B |
| Operating Expenses | $-61.0M | $-28.0M | $-83.0M | $-112.0M |
| Operating Income | $8.35B | $8.51B | $7.01B | $7.73B |
| R&D | $1.70B | $1.50B | $1.60B | $2.00B |
| Stock-Based Comp | $238.0M | $265.0M | $277.0M | $304.0M |
| D&A | $1.16B | $1.43B | $1.56B | $1.69B |
| Depreciation | $903.0M | $920.0M | $967.0M | $1.00B |
| Amortization | $248.0M | $247.0M | $247.0M | $254.0M |
| Other OpEx | $-1.76B | $-1.53B | $-1.68B | $-2.11B |
| Non-Operating Income | $-1.67B | $-409.0M | $-793.0M | $-1.81B |
| Interest Expense | $623.0M | $916.0M | — | — |
| Pre-Tax Income | $6.68B | $8.10B | $6.22B | $5.92B |
| Income Tax | $948.0M | $1.18B | $884.0M | $905.0M |
| Continuing Ops | $5.73B | $6.92B | $5.34B | $5.02B |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $5.73B | $6.92B | $5.34B | $5.02B |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $5.73B | $6.92B | $5.34B | $5.02B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $20.99B | $20.52B | $21.85B | $25.36B |
| Cash & Equivalents | $2.55B | $1.44B | $2.48B | $4.12B |
| Inventory | $3.09B | $3.13B | $3.47B | $3.52B |
| Other Current Assets | $15.36B | $15.95B | $15.89B | $17.72B |
| Long-Term Assets | $31.89B | $31.93B | $33.77B | $34.48B |
| PP&E (Net) | $7.97B | $8.37B | $8.73B | $8.88B |
| Intangibles | $2.46B | $2.21B | $2.02B | $1.89B |
| Goodwill | $10.78B | $10.80B | $11.07B | $11.31B |
| Operating Leases | $1.10B | $1.10B | $1.00B | $976.0M |
| Other LT Assets | $8.89B | $8.75B | $10.31B | $10.77B |
| Total Assets | $52.88B | $52.46B | $55.62B | $59.84B |
| Current Liabilities | $15.89B | $16.94B | $19.42B | $23.34B |
| Accounts Payable | $2.12B | $2.31B | $2.22B | $3.63B |
| Current Debt | $118.0M | $168.0M | $643.0M | $1.17B |
| Deferred Revenue | $8.49B | $9.19B | $9.79B | $11.44B |
| Other Current Liab | $5.16B | $5.27B | $6.76B | $7.10B |
| Long-Term Liabilities | $27.73B | $28.68B | $29.86B | $29.78B |
| Long-Term Debt | $15.43B | $17.29B | $19.63B | $20.53B |
| LT Operating Leases | $916.0M | $862.0M | $833.0M | $825.0M |
| Other LT Liab | $11.38B | $10.53B | $9.40B | $8.43B |
| Total Liabilities | $43.61B | $45.62B | $49.28B | $53.12B |
| Shareholders' Equity | $9.27B | $6.83B | $6.33B | $6.72B |
| Retained Earnings | $16.94B | $15.40B | $14.55B | $14.03B |
| AOCI | $-8.02B | $-8.80B | $-8.45B | $-7.54B |
| Total L&E | $52.88B | $52.46B | $55.62B | $59.84B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $5.73B | $6.92B | $5.34B | $5.02B |
| Non-Cash Adjustments | $-1.10B | $27.0M | $670.0M | $-1.22B |
| Working Capital Changes | $3.17B | $973.0M | $966.0M | $4.76B |
| Cash from Operations | $7.80B | $7.92B | $6.97B | $8.56B |
| Cash from Investing | $-1.79B | $-1.69B | $-1.79B | $-1.98B |
| Share Buybacks | $7.90B | $6.00B | $3.70B | $3.00B |
| Dividends Paid | $3.02B | $3.06B | $3.06B | $3.13B |
| Cash from Financing | $-7.07B | $-7.33B | $-4.14B | $-4.94B |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $-1.06B | $-1.10B | $1.04B | $1.64B |
| Beginning Cash | $3.60B | $2.55B | $1.44B | $2.48B |
| Ending Cash | $2.55B | $1.44B | $2.48B | $4.12B |
Frequently Asked Questions
How does LOCKHEED MARTIN CORP make money?
The company derives revenue primarily from its Mission Systems (missiles and munitions), Aeronautics (fighter jets and transport aircraft), Rotary and Mission Systems (helicopters and rotorcraft), and Space (satellites and launch services) segments, supported by Information Systems and Global Solutions providing IT and logistics support.
What are the main risks for LMT?
Investors should consider risks related to prolonged federal budget constraints or defense spending cuts, potential supply chain disruptions affecting critical components, geopolitical instability impacting global demand for defense goods, and the possibility of contract modifications leading to lower-than-expected future revenue streams.
What is LMT's competitive advantage?
Lockheed Martin possesses a formidable competitive moat through decades of government contracting relationships, extensive intellectual property in stealth technology and propulsion systems, and a highly skilled workforce capable of executing complex, multi-year defense programs that few competitors can match.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.