Lockheed Martin (LMT): Revenue +5.14%, Net Income -22.89% — Risk & Cash Review

FY2024 results deliver the central tension: top‑line growth and sharply lower profit#

Lockheed Martin reported FY2024 revenue of $71.04 billion (+5.14%) while net income fell to $5.34 billion (-22.89%), a divergence that frames both operational and governance questions for 2025. The company’s reported EBITDA of $8.82 billion produced an EBITDA margin of 12.41%, but cash flow and capital allocation choices — including $3.70 billion of share repurchases and $3.06 billion of dividends paid in FY2024 — left the balance sheet with $17.79 billion of net debt at year end. These reported outcomes sit alongside active securities‑fraud litigation that alleges program mismanagement and overstatement of delivery capabilities; the class action timetable makes the matter time‑sensitive, with a lead plaintiff deadline of September 26, 2025.

The simple arithmetic tells the immediate story: revenue expanded modestly while profitability contracted materially. Revenue climbed from $67.57B in FY2023 to $71.04B in FY2024 (+5.14%), but operating income slipped to $7.01B, and net income declined to $5.34B. The divergence between rising revenue and falling bottom‑line results elevates questions about program margins, one‑off charges or mix shifts, and the quality of earnings — questions that acquire additional salience given the ongoing securities litigation that centers on program performance disclosures.

This article synthesizes Lockheed Martin’s FY2024 financials, capital allocation, and the implications of the pending litigation. Where dataset metrics conflicted with raw statement math we recalculated ratios from the published FY2024 statements and highlight the discrepancies, prioritizing the company’s line‑item financials for transparency and traceability. All core financial figures below derive from Lockheed Martin’s FY2024 filings and consolidated statements Lockheed Martin FY2024 filings and standard SEC filing resources SEC EDGAR.

Financial performance: margins, cash flow quality and adjusted metrics#

Lockheed Martin’s margin profile shows compression through FY2024. Gross profit of $6.93B produced a gross margin of 9.75%, while operating income of $7.01B translated to an operating margin of 9.87%. Net income of $5.34B yields a net margin of 7.51%. Those margin calculations are direct divisions of the FY2024 line items (gross profit / revenue, operating income / revenue, net income / revenue) and match the company’s reported percent values.

Free cash flow remains substantial but softened year over year. Lockheed reported free cash flow of $5.29B in FY2024, equal to a free cash flow margin of 7.45% (free cash flow / revenue). Operating cash flow was $6.97B, or 9.81% of revenue. Free cash flow declined relative to the prior two years (FY2023 $6.23B, FY2022 $6.13B), consistent with the dataset’s growth metrics showing free cash flow growth of -15.12% year over year.

Not all headline metrics are internally consistent in the raw dataset. For example, the balance‑sheet line items yield a computed current ratio of 1.13x (total current assets $21.85B / total current liabilities $19.42B), while an aggregate “currentRatioTTM” figure in the dataset is 0.98x. Likewise, our computed net debt to EBITDA (net debt $17.79B / EBITDA $8.82B) equals 2.02x, materially different from a dataset TTM figure of 0.24x. Where such discrepancies appear we rely on the line‑item math from the FY2024 statements and note possible causes (different denominator windows, classification differences, or data‑aggregation errors) in our analysis.

Income statement snapshot (calculated from company line items)#

These figures show a clear pattern: revenue grew modestly but margins contracted across gross, operating and EBITDA measures. The primary drivers implied by the statements are higher cost of revenue (cost of revenue rose to $64.11B in FY2024) and a lower gross profit dollar base versus the prior year.

Balance sheet and capital allocation: leverage, buybacks and dividend mechanics#

Lockheed’s balance sheet reflects active capital return and rising leverage. At FY2024 year‑end total assets were $55.62B, total liabilities $49.28B, and total stockholders’ equity $6.33B. Total debt stood at $20.27B with cash and cash equivalents of $2.48B, producing net debt of $17.79B. Using these line items yields a computed debt / equity of 320.28% (total debt $20.27B / equity $6.33B) and a net debt / EBITDA of 2.02x as noted above.

Buybacks have been a major use of cash. Over the last four years Lockheed repurchased approximately $21.69B of stock (FY2021 $4.09B, FY2022 $7.9B, FY2023 $6.0B, FY2024 $3.7B). Those buybacks materially reduced shareholders’ equity (FY2021 equity $10.96B → FY2024 equity $6.33B) and help explain the elevated computed ROE and price‑to‑book multiples. The company also continued its sizable dividend program, paying $3.06B in FY2024 (dividend per share TTM $13.05), which corresponds to a payout ratio on reported net income of 57.24% (dividends paid / net income) and a payout ratio on reported EPS basis of 72.50% (dividend per share $13.05 / net income per share TTM $18.00).

These capital allocation choices create a tradeoff: repurchases and dividends return cash to shareholders but reduce equity buffers and increase leverage exposure. With net debt / EBITDA ~2.02x and total debt elevated versus equity, Lockheed’s balance sheet is still investment‑grade in absolute terms for a defense prime, but it is plainly more leveraged than it was in FY2021 when net debt was $8.07B. The shift toward higher leverage is an essential context for understanding both credit risk and financial flexibility around program recoveries or litigation outcomes.

Balance sheet snapshot (calculated from company line items)#

Capital allocation: dividends, buybacks and their effects on returns#

Lockheed remains a high cash‑return company. The TTM dividend per share of $13.05 and the company’s ongoing repurchase program have meaningfully reduced equity on the balance sheet, amplifying return on equity measures. Using FY2024 year‑end equity produces a computed ROE of +84.39% (net income $5.34B / equity $6.33B). That elevated ROE largely reflects capital returned to shareholders rather than an operating‑only efficiency gain; the denominator (equity) has been compressed by sustained repurchases, which inflates ROE mechanically.

Two payout metrics show different angles of cash distribution. On a cash basis, dividends paid in FY2024 were $3.06B, which equals 57.24% of reported net income. On a per‑share basis, dividends $13.05 against reported net income per share TTM $18.00 yields a payout ratio of 72.50%. The higher per‑share payout ratio reinforces that a significant share of earnings is being returned to shareholders rather than reinvested, limiting internal reinvestment for large, capital‑intensive program recoveries.

Capital allocation has implications for optionality. With net debt edging higher and repurchase activity planned historically, Lockheed’s ability to finance large one‑off remediation, acquisitions, or sustained program rework without increasing leverage further is constrained. That constraint matters if litigation or contract remediation generates material cash requirements.

Litigation and governance risk: the securities suit raises actionable timelines#

Separately from the accounting math, Lockheed faces securities‑fraud litigation alleging the company misstated program execution and delivery capabilities, and maintained deficient internal controls. Those allegations center on program‑level losses and delivery shortfalls on major contracts and ask whether prior public statements were materially misleading relative to internal program realities.

A near‑term procedural milestone sharpens investor attention: the dataset identifies a lead plaintiff deadline of September 26, 2025 for the pending class action. The appointment of a lead plaintiff can materially shape discovery priorities, settlement posture and timing. A successful plaintiff case or a large settlement could impose direct financial costs (legal fees, settlements, remediation) and indirect costs (procurement scrutiny, delays in contract awards) that would interact with Lockheed’s more leveraged balance sheet. Investors should treat the deadline as a governance event with potential balance‑sheet implications; the exact quantum of financial exposure will depend on case developments and any regulatory follow‑on activity.

The allegations also raise procurement risk. Government customers — particularly the Department of Defense — evaluate past performance and financial health when awarding multi‑year programs. Even absent an adverse legal finding, heightened oversight, audits, milestone payment adjustments or enhanced contractual conditions could increase program costs and delay revenue realization. In short, the litigation compounds financial sensitivity by adding uncertainty to both near‑term cash flows and program margin recovery.

Strategic and competitive context: product complexity, backlog, and margin pressure#

Lockheed operates in a market where product complexity and long program durations create lumpy results. FY2024’s margin compression appears driven by higher cost of revenue and program execution pressure rather than a top‑line demand collapse. The company’s backlog and large prime contract positions provide revenue stability, but program‑level execution and cost management determine margins.

Against peers, Lockheed’s fundamentals show durable cash generation but an increased leverage profile and aggressive capital return program. The market premiums (market cap $104.36B) and the company’s historical role as a technology and scale leader support continued program wins, but margin resilience depends on execution improvements, supply chain normalization and clarity around contested programs.

Analyst estimate pathways in the dataset show revenue CAGR expectations in the mid‑single digits and EPS growth projected to accelerate through the middle of the decade (e.g., estimated EPS $22.46 for 2025 and rising toward $34.03 by 2029 in the dataset). Those forecast paths assume improvement in program margins and successful capital allocation; they should be viewed in light of current litigation and FY2024 margin trends.

Valuation context and key multiples (computed from FY2024 line items)#

Market capitalization at the time of the dataset is $104.36B (price $447). Using our FY2024 numbers produces an estimated enterprise value of $122.15B (market cap + total debt $20.27B - cash $2.48B). From those figures we calculate an EV / EBITDA of 13.85x (enterprise value / EBITDA $8.82B) and a price to book of 16.49x (market cap / shareholders’ equity $6.33B). Note that some dataset fields reported different TTM multiples; where discrepancies exist we present line‑item math and flag the differences for readers.

Price / earnings using reported EPS (EPS TTM ~ $17.80) yields a computed P/E of 25.11x (price $447 / EPS $17.80), consistent with the stock quote block. That multiple reflects investors’ willingness to pay for stable government backlog and cash returns, but it also embeds expectations for margin recovery given the recent contraction in profitability.

What this means for investors (data‑driven implications)#

Lockheed combines a resilient top‑line franchise with rising near‑term execution and governance risk. The FY2024 results show three interacting dynamics that matter for stakeholders: modest revenue growth (+5.14%), material margin compression (net income -22.89%), and elevated leverage driven in part by multi‑year repurchases. Together, these amplify the potential balance‑sheet impact of the pending securities litigation.

First, margin recovery is the principal earnings knob. A return of gross and operating margins toward FY2021/2022 levels would improve free cash generation and reduce leverage ratios. Operational levers include program cost control, subcontractor management and efficient schedule recovery. Second, capital allocation has limits: ongoing repurchases and a high dividend reduce the equity buffer that would otherwise absorb program remediation costs. The computed net debt / EBITDA of 2.02x and the compressed equity base mean large, unanticipated cash outflows (e.g., from litigation or contract penalties) would likely push leverage higher and limit discretionary buybacks. Third, governance and procurement risk from the securities case is real and timely: procedural deadlines through September 26, 2025 can accelerate discovery and potential settlement dynamics, with quantifiable financial and reputational consequences depending on outcomes.

Investors should watch three measurable indicators in the near term: sequential margin commentary in quarterly reports (are cost reductions visible?), cash flow conversion (operating cash flow / net income), and litigation docket activity (motions, lead plaintiff appointment, discovery milestones). Improvements in those metrics would materially change the company’s risk profile; negative developments would increase cash and credit sensitivity.

Key takeaways#

Lockheed Martin’s FY2024 presents a mixed financial picture. Revenue growth of +5.14% contrasts with a -22.89% decline in net income and meaningful margin compression. Free cash flow remains positive ($5.29B), but capital returns have materially reduced equity and increased leverage: computed debt / equity is +320.28% and net debt / EBITDA ~2.02x. Active securities litigation alleging program disclosure failures adds governance and procurement risk with a near‑term procedural milestone on September 26, 2025. Investors and stakeholders should monitor margin recovery, cash‑conversion trends, and litigation docket developments as the primary drivers of credit and valuation sensitivity.

What follows next is not a recommendation but an evidence‑based checklist: monitor quarterly margin commentary, track operating cash flow conversion against reported earnings, and follow the litigation docket for settlement or discovery signals. These are the measurable inputs that will determine whether FY2024’s margin weakness is transitory or a structural inflection.

---

What this means for investors: Lockheed’s franchise and backlog continue to underpin revenue, but FY2024 shows operating stress and capital‑allocation choices that make outcomes more sensitive to program execution and litigation developments. Close attention to sequential margins, cash flows and legal milestones will determine whether the company’s long‑term trajectory remains intact or requires deeper operational remediation.

Sources: Financials and line‑item figures from Lockheed Martin FY2024 consolidated statements Lockheed Martin FY2024 filings. Litigation timing and allegations derived from publicly filed class action complaints and court notices (lead plaintiff deadline reported as September 26, 2025) and related filings PACER / court filings.