Lockheed Martin on Tuesday reported a strong close to its 2019 fiscal year with double-digit top and bottom line growth, and the company expects further gains in 2020.
Net income in the fourth quarter jumped 15% to $1.5 billion, $5.29 earnings per share (EPS), from $1.3 billion ($4.39 EPS) a year ago, comfortably above consensus estimates by $0.26 a share. Total operating margin climbed 70 basis points to 13.5%.
Sales in the quarter increased 10% to $15.9 billion from $14.4 billion a year ago.
Lockheed Martin Chairman, President, and CEO Marillyn Hewson said 2019 was “remarkable” and “extraordinary” during an earnings call with analysts.
All four of the company’s operating segments enjoyed higher revenue, with the Space and Missiles and Fire Control businesses up 14% each on hypersonic development work in both segments, Next Generation Overhead Persistent Infrared (OPIR) and GPS III satellite programs and government satellite services, precision fires, missile defense programs, and a logistics support contract for Special Operations Forces.
Sales at the Aeronautics and Rotary and Mission Systems (RMS) segments were up in the high single digits on F-35 fighter sustainment and development work, classified work, Army sustainment, and undersea combat systems programs, and for work on the Littoral Combat Ship and Aegis programs.
Lockheed has a long and continuing history of contributions to the U.S. nuclear arsenal, having built the Trident II-D5 ballistic missiles carried by Ohio-class submarines. The company’s is also part of Northrop Grumman’s team that appears locked to win the contract to build the Air Force’s next-generation intercontinental ballistic missile: the Ground-Based Strategic Deterrent.
Bottom-line gains were driven by a pension tailwind and higher operating profits at three operating segments: RMS, Space and Aeronautics. These segments benefitted from work on the Advanced Extremely High Frequency, Next Gen OPIR, and GPS III satellite programs, fleet ballistic missile programs, Sikorsky helicopter programs, F-35 sustainment, development and production, and the absence of reserves taken a year ago at RMS.
Overall, in 2019, sales increased 11% to a record $59.8 billion from $53.8 billion in 2018 and net income soared 24% to $6.2 billion ($21.95 EPS) from $5 billion ($17.59 EPS). Per share earnings for 2019 were also a record.
