Stock Analysis on Net
Stock Analysis on Net

Lockheed Martin Corp. (NYSE:LMT)

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Common-Size Income Statement

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Lockheed Martin Corp., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Products
Services
Net sales
Products
Services
Impairment and severance charges
Other unallocated, net
Cost of sales
Gross profit
Other income (expense), net
Operating profit
Interest expense
Non-service FAS pension income (expense)
Other non-operating income (expense), net
Earnings from continuing operations before income taxes
Income tax expense
Net earnings from continuing operations
Net loss from discontinued operations
Net earnings

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Sales Composition
The proportion of net sales derived from products remained relatively stable, fluctuating slightly around 83-84% over the analyzed period. Services contributed between 15.8% and 16.7% of net sales, showing a marginal increase in the middle years before slightly decreasing. Overall, the sales mix indicates a consistently dominant products segment with a stable services contribution.
Cost Structure
The cost of sales as a percentage of net sales increased notably, rising from approximately 86.8% in 2020 to over 90% by 2024. The cost attributed to products experienced a notable increase in the final year, reaching -77.21%, indicating a higher cost burden relative to sales in the products segment. Service-related costs remained comparatively stable, fluctuating around -14%. Impairment and severance charges, although minor in magnitude, saw a peak in 2022 before declining thereafter.
Profitability
Gross profit margins experienced a declining trend, moving from about 13.2% in 2020 down to under 10% by 2024, reflecting increasing cost pressures. Operating profit margins mirrored this pattern, decreasing from 13.2% to approximately 9.9% over the same period. The diminishing margins suggest tightening profitability possibly due to rising costs or pricing pressures.
Other Income and Expenses
Other income and expense items showed mixed movements with marginal net positive impacts in recent years. Interest expense as a percentage of net sales increased steadily from -0.9% to -1.46%, indicating growing financing costs relative to sales. The non-service FAS pension component fluctuated, showing negative impacts in 2021 and 2022 followed by a moderate recovery. Other non-operating income remained minor but positive in several years.
Income and Earnings
Earnings from continuing operations before income taxes declined from 12.6% to 8.8% of net sales, exhibiting a downtrend consistent with reduced operating profits. Income tax expense as a percentage of net sales lessened over time, potentially reflecting favorable tax positioning or changing earnings composition. Net earnings from continuing operations similarly declined from 10.5% in 2020 to 7.5% in 2024, demonstrating diminished profitability. Net loss from discontinued operations was minimal and only appeared once, with no subsequent impact recorded.
Summary
The overall financial trends indicate stable sales composition but rising costs, leading to compressing gross and operating profit margins. Increasing interest expenses and variable pension impacts contributed to fluctuating non-operating results. Despite slight improvements in tax efficiency, net profitability showed a downward trajectory over the period analyzed, pointing toward emerging challenges in managing cost structures and sustaining earnings growth.