Lockheed Martin Reports Second Quarter 2025 Financial Results
Sales of $18.2 billion
Recorded pre-tax losses on programs of $1.6 billion and other charges of $169 million, which impacted earnings per share by $5.83
Net earnings of $342 million, or $1.46 per share, including impacts of program losses and other charges
Cash from operations of $201 million and free cash flow of $(150) million
Returned $1.3 billion of cash to shareholders through dividends and share repurchases
Reaffirming 2025 guidance for sales and free cash flow
BETHESDA, Md., July 22, 2025 /PRNewswire/ -- Lockheed Martin Corporation (NYSE:LMT) today reported second quarter 2025 sales of $18.2 billion, compared to $18.1 billion in the second quarter of 2024. Net earnings in the second quarter of 2025 were $342 million, or $1.46 per share, including $1.6 billion of program losses and $169 million of other charges. This compares to $1.6 billion, or $6.85 per share, in the second quarter of 2024. Cash from operations was $201 million in the second quarter of 2025, compared to $1.9 billion in the second quarter of 2024. Free cash flow was $(150) million in the second quarter of 2025, compared to $1.5 billion in the second quarter of 2024.
"Over the course of the past few months, Lockheed Martin systems and platforms once again proved highly effective in combat operations and in deterring further aggression. Our F-35s, F-22s, PAC-3, THAAD, Aegis and many others, crewed by the soldiers, airmen, sailors, marines and guardians of the U.S. and its Allies, and supported by our own dedicated teammates, performed extremely well in the most crucial and challenging situations," said Lockheed Martin Chairman, President and CEO Jim Taiclet. "Based in part on this record of performance as well as the promise of several advanced technologies in development, our U.S. and allied customers are asking us to elevate and accelerate many key programs. For example, several allied nations have recently announced additional F-35 purchases, the U.S. Army has awarded more than $1 billion in missile-related contracts so far, and the U.S. Space Force is ordering additional GPS IIIF satellites. At the same time, our ongoing program review process identified new developments that caused us to re-evaluate the financial position on a set of major legacy programs. As a result, we are taking a number of charges this quarter to address these newly identified risks. We remain committed to delivering these critical capabilities that our customers are counting on and are fully focused on the growth inflection we expect as the result of heightened interest and demand for Lockheed Martin's products and technologies.
"Overall, the company's foundation remains solid and resilient. In the second quarter, sales of $18 billion grew sequentially, as we continued to drive supply chain improvements and ramp capacity on needed deterrent capabilities. In addition, we invested $800 million in infrastructure and innovation for growth and returned $1.3 billion to shareholders through dividends and share repurchases. We are maintaining full year 2025 guidance for sales, cash from operations, capital expense, free cash flow, and share repurchases. The program charges taken in the quarter, which resulted from our ongoing rigorous monitoring and review processes, are a necessary step as we continue to take action to improve program execution. We're investing in emerging technologies, and as a proven mission integrator, we remain well positioned to support critical programs like the Golden Dome for America. Our relentless focus on operational performance combined with our disciplined capital allocation strategy will enable us to deliver value to our shareholders, while providing the advanced solutions that America and its allies need to maintain peace through strength for decades to come."
Program Losses and Other Charges
During the second quarter, the Company took important steps to address challenges on a classified program at its Aeronautics business segment and certain international helicopter programs at its Sikorsky business unit.. The Company also recognized other charges related to asset impairments and a tax matter as described below.
Aeronautics Classified Program, Aeronautics has experienced design, integration, and test challenges, as well as other performance issues on this program. These trends continued into 2025 and had a greater impact on schedule and costs than previously estimated. As a result, Aeronautics performed a comprehensive review of its program execution and management processes to achieve the technical requirements of the program, which was completed in the second quarter. Based on this review and ongoing discussions with the customer and suppliers, Aeronautics made significant changes to its processes and testing approach, resulting in significant updates to the program's schedule and cost estimates. As a result, during the second quarter of 2025 the Company recognized additional pretax reach-forward losses of $950 million on the program.
Canadian Maritime Helicopter Program (CMHP) – The Company is in ongoing discussions with the customer regarding a potential restructure to certain contractual terms and conditions and to expand the scope of work that would be beneficial to both parties. Communications with the customer during the second quarter of 2025 led to subsequent decisions made by the Company to focus on providing additional mission capabilities, enhanced logistical support, fleet life extension, and revised expectations regarding flight hours. As a result of revised cost and sales estimates for the program during the second quarter of 2025, the Company recognized additional pretax losses of $570 million on this program in RMS' financial results.
Türkish Utility Helicopter Program (TUHP) – The Company has been discussing a potential mutually agreeable framework to restructure the program, including changing the scope of work. In light of the status of the continuing discussions with the customer and the current status of the program, RMS revised its cost and sales estimates for this program. As a result, during the second quarter of 2025, the Company recognized additional pretax reach-forward losses of $95 million on this program in RMS' financial results.
Other Charges – During the second quarter of 2025, the company recognized a charge of $66 million primarily for the write-off of fixed assets resulting from the U.S. Air Force's Next Generation Air Dominance (NGAD) down-select decision. The company also recognized a charge of $103 million related to uncertain tax positions as part of its income tax expense, resulting from the Internal Revenue Service's proposed adjustments to its tax accounting method change for certain manufacturing contracts.
The table below provides supplemental information regarding the impacts of the program losses and other charges described above.
(in millions, except per share data)
Quarter Ended
June 29,
2025
Aeronautics classified program loss
$ (950)
CMHP program loss
(570)
TUHP program loss
(95)
Business segment operating profit
(1,615)
Fixed asset write-off
(66)
Unallocated other1
81
Consolidated operating profit
(1,600)
Income tax benefit2
233
Net earnings
$ (1,367)
Weighted average shares outstanding
234.3
Diluted earnings per share
$ (5.83)
1
Reflects the state income tax impact associated with the program losses based on a blended state tax rate of 5%.
2
Reflects the federal income tax impact associated with the program losses and fixed asset write-off net of the associated state income taximpacts based on a federal tax rate of 21%, partially offset by the charge of $103 million associated with the uncertain tax position.
Summary Financial Results
The following table presents the company's summary financial results:
(in millions, except per share data)
Quarters Ended
Six Months Ended
June 29,
2025
June 30,
2024
June 29,
2025
June 30,
2024
Sales
$ 18,155
$ 18,122
$ 36,118
$ 35,317
Business segment operating profit1,2
$ 571
$ 2,042
$ 2,656
$ 3,787
Unallocated items
FAS/CAS pension operating adjustment
379
406
758
812
Impairment and other charges3
(66)
(87)
(66)
(87)
Intangible asset amortization expense
(63)
(61)
(127)
(122)
Other, net
(73)
(152)
(101)
(213)
Total unallocated items
177
106
464
390
Consolidated operating profit
$ 748
$ 2,148
$ 3,120
$ 4,177
Net earnings4
$ 342
$ 1,641
$ 2,054
$ 3,186
Diluted earnings per share
$ 1.46
$ 6.85
$ 8.75
$ 13.24
Cash from operations
$ 201
$ 1,876
$ 1,610
$ 3,511
Capital expenditures
(351)
(370)
(805)
(748)
Free cash flow1
$ (150)
$ 1,506
$ 805
$ 2,763
1
Business segment operating profit and free cash flow are non-GAAP measures. See the "Use of Non-GAAP Financial Measures" section ofthis news release for more information.
2
As previously described, business segment operating profit for the quarter ended June 29, 2025 included losses of $950 million ($713 million, or $3.04 per share, after-tax) on a classified program at its Aeronautics business segment, and $570 million ($428 million, or $1.83 per share,after-tax) on CMHP and $95 million ($71 million, or $0.30 per share, after-tax) on TUHP at its RMS business segment.
3
Impairment and other charges for the quarter ended June 29, 2025 included $66 million ($52 million, or $0.22 per share, after-tax) primarilyfor the write-off of fixed assets at its Aeronautics business segment.
4
Net earnings for the quarter ended June 29, 2025 included $103 million of income tax expense related to uncertain tax positions.
Cash from operations in the second quarter of 2025 was $201 million with free cash flow of $(150) million compared to $1.9 billion with $1.5 billion in free cash flow in the second quarter of 2024. The decrease in cash from operations was primarily due to an increase in working capital, which is defined as receivables, contract assets, and inventories less accounts payable and contract liabilities. This increase in working capital was driven by four main factors: production and invoice timing impacting receivables, primarily related to the F-35 program at Aeronautics; an increase in contract assets as a result of the timing of milestones, also primarily related to the F-35 program at Aeronautics; an increase in Sikorsky inventory at RMS; and billing cycles impacting contract liabilities primarily related to national security space programs at Space. The decrease in free cash flows was primarily due to these cash from operations drivers.
The company's cash activities in the quarter ended June 29, 2025, included the following:
paying cash dividends of $771 million;
paying $500 million to repurchase 1.0 million shares;
receiving net proceeds of $1.4 billion from the issuance of commercial paper; and
making a scheduled repayment of $142 million of long-term debt.
2025 Financial Outlook
The company's financial outlook for 2025 and other sections of this news release contain forward-looking statements, which reflect the company's judgment based on the information available at the time of this news release. The financial outlook for 2025 does not include the evolving impacts of tariffs or related recoveries, or Executive Orders issued by the Administration. Additionally, it is the company's practice not to incorporate adjustments into its financial outlook for proposed or potential acquisitions, divestitures, ventures, future gains or losses related to changes in valuations of the company's net assets and liabilities for deferred compensation plans or early-stage company investments, pension annuity contracts or discretionary contributions, financing transactions, changes in law, or new accounting standards until such items have been consummated, enacted or adopted. Actual results may differ materially from those projected. For additional factors that may impact the company's actual results, refer to the "Forward-Looking Statements" section in this news release.
(in millions, except per share data)
Current Update
April 2025
Sales
~$73,750 - $74,750
~$73,750 - $74,750
Business segment operating profit1
~$6,600 - $6,700
~$8,100 - $8,200
Total FAS/CAS pension adjustment
~$1,125
~$1,125
Diluted earnings per share
~$21.70 - $22.00
~$27.00 - $27.30
Cash from operations
~$8,500 - $8,700
~$8,500 - $8,700
Capital expenditures
~$1,900
~$1,900
Free cash flow1
~$6,600 - $6,800
~$6,600 - $6,800
1
Business segment operating profit and free cash flow are non-GAAP measures. See the "Use of Non-GAAP Financial Measures" section of this news release for more information.
Segment Results
The company operates in four business segments organized based on the nature of products and services offered: Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS) and Space. The following table presents summary operating results of the company's business segments and reconciles these amounts to the company's consolidated financial results.
(in millions)
Quarters Ended
Six Months Ended
June 29,
2025
June 30,
2024
June 29,
2025
June 30,
2024
Sales
Aeronautics
$ 7,420
$ 7,277
$ 14,477
$ 14,122
Missiles and Fire Control
3,433
3,102
6,806
6,095
Rotary and Mission Systems
3,995
4,548
8,323
8,636
Space
3,307
3,195
6,512
6,464
Total sales
$ 18,155
$ 18,122
$ 36,118
$ 35,317
Operating profit (loss)
Aeronautics1
$ (98)
$ 751
$ 622
$ 1,430
Missiles and Fire Control
479
450
944
761
Rotary and Mission Systems2
(172)
495
349
925
Space
362
346
741
671
Total business segment operating profit
571
2,042
2,656
3,787
Unallocated items
FAS/CAS operating adjustment
379
406
758
812
Impairment and other charges3
(66)
(87)
(66)
(87)
Intangible asset amortization expense
(63)
(61)
(127)
(122)
Other, net
(73)
(152)
(101)
