Strong Third Quarter Results Reflect Your Focus in Uncertain Times
October 22, 2013
To All Lockheed Martin Employees:
Thanks to your focus and outstanding performance, we announced strong third quarter results today, despite the declining government budgets and an increasingly competitive environment.
In the third quarter, we increased our net earnings from continuing operations by 16 percent to $842 million, even as sales declined by four percent to $11.3 billion. Our backlog increased to $78.7 billion, and our cash from operations was $900 million after pension contributions of $750 million. We also returned value to our stockholders by repurchasing 4.9 million shares of stock and paying $370 million in cash dividends.
Our financial results are a reflection of your contributions throughout the quarter as we delivered on critical commitments. Among the highlights:
- The F-35 continues to make strong progress on all fronts. Notably, we reached an agreement with the DOD for low rate initial production (LRIP) lots 6 and 7, totaling 71 aircraft, including the first international deliveries to Italy, Australia and Norway. We’re driving per-unit costs lower with each lot, while also meeting key performance milestones on existing operational jets.
- Four of our business areas participated in a ground-breaking Missile Defense Agency test that proved the value of an integrated, layered missile shield. The Terminal High-Altitude Area Defense (THAAD); Aegis; and Command, Control, Battle Management and Communications (C2BMC) systems worked in concert to successfully intercept two medium-range ballistic missile targets.
- We successfully launched the third Advanced Extremely High Frequency (AEHF) military communications satellite, which will vastly improve strategic and tactical communications capabilities for the U.S. and international partners.
We are also making good progress in growing our international business. We acquired the Amor Group, a UK-based company that expands our capabilities in information technology solutions for the energy, transport and public services sectors. The Netherlands officially selected the F-35 as the replacement for its fleet of F-16s. We received a contract to produce THAAD interceptors for the U.S. Missile Defense Agency and the United Arab Emirates. And we were selected to design the Active Network Infrastructure to support the IT needs of more than 4,500 users at NATO headquarters in Brussels, Belgium for up to five years.
In spite of the government shutdown and the pressures surrounding our business and industry, I remain confident in our future because of your outstanding performance, innovation and integrity in support of our customers and their missions.
Thank you again for your strong performance this quarter and for staying focused, dedicated and resolute.
Marillyn A. Hewson,
Chief Executive Officer and President