31 Jan 25. The Reportsing Season kicked off in the USA with the US Majors reporting constinued strong revenue and profits from the continued grwoth of international defence markets, with most companies beating anaylts estimates. Lockheed Martin’s Results were clouded by two cahrhges totalling £2bn on two Classified Progaremmnes one in the MFC Divison, the other in Aeronautics.
Boeing
28 Jan 25. Boeing stock rallies on plane progress despite $11.8bn annual loss.
Boeing reports $11.8bn annual loss after crisis-ridden year
- Summary
- Companies
- Boeing reports largest loss since 2020
- Boeing expects 737 MAX production to reach 38 airplanes a month rate by mid-year, and go higher in second half
- Boeing 787 production rate expected to increase from 5 airplanes a month to 7, with at least 75-80 deliveries this year
Boeing said on Tuesday it was making progress on increasing plane production, and its shares jumped nearly 8%, despite the company recording its biggest annual loss in four years.
The $11.8bn loss, due to problems at its major units, along with fallout from a crippling strike that shuttered production of most of its jets, demonstrates the challenges facing CEO Kelly Ortberg in turning around the U.S. planemaker.
Boeing has ceded ground to rival Airbus (AIR.PA) in the delivery race and entered the crosshairs of regulators and customers following a series of missteps.
CFO Brian West told analysts the planemaker had delivered 33 of its strongest-selling 737 jets so far in January. West added the company expects to be in position later this year to exceed a cap of 38 per month imposed by U.S. regulators, but would need approval of the Federal Aviation Administration. (Source: Reuters)
28 Jan 25. Boeing Reports Fourth Quarter Results.
Fourth Quarter 2024
- Finalized the International Association of Machinists and Aerospace Workers (IAM) agreement and resumed production across the 737, 767 and 777/777X programs
- Financials reflect previously announced impacts of the IAM work stoppage and agreement, charges for certain defense programs, and costs associated with workforce reductions announced last year
- Revenue of $15.2 bn, GAAP loss per share of ($5.46) and core (non-GAAP)* loss per share of ($5.90)
- Operating cash flow of ($3.5)bn; cash and marketable securities of $26.3bn
Full Year 2024
- Delivered 348 commercial airplanes and recorded 279 net orders
- Total company backlog grew to $521bn, including over 5,500 commercial airplane
The Boeing Company [NYSE: BA] recorded fourth quarter revenue of $15.2bn, GAAP loss per share of ($5.46) and core loss per share (non-GAAP)* of ($5.90) primarily reflecting previously announced impacts of the IAM work stoppage and agreement, charges for certain defense programs, and costs associated with workforce reductions announced last year. Boeing reported operating cash flow of ($3.5)bn and free cash flow of ($4.1)bn (non-GAAP)*.
“We made progress on key areas to stabilize our operations during the quarter and continued to strengthen important aspects of our safety and quality plan,” said Kelly Ortberg, Boeing president and chief executive officer. “My team and I are focused on making the fundamental changes needed to fully recover our company’s performance and restore trust with our customers, employees, suppliers, investors, regulators and all others who are counting on us.”
Operating cash flow was ($3.5)bn in the quarter reflecting lower commercial deliveries, as well as unfavorable working capital timing, primarily driven by the IAM work stoppage.
Cash and investments in marketable securities totaled $26.3bn, compared to $10.5bn at the beginning of the quarter, primarily driven by a $24bn capital raise partially offset by free cash flow usage and debt repayment in the quarter. Debt was $53.9bn, down from $57.7bn at the beginning of the quarter, driven by the early repayment of a $3.5bn bond originally maturing in 2025. The company maintains access to credit facilities of $10.0bn, which remain undrawn.
Total company backlog at quarter end was $521bn.
Segment Results
Commercial Airplanes
Commercial Airplanes fourth quarter revenue of $4.8bn and operating margin of (43.9) percent reflect the previously announced impacts associated with the IAM work stoppage and agreement including lower deliveries and pre-tax charges of $1.1bn on the 777X and 767 programs.
The 737 program resumed production in the quarter and plans to gradually increase production rate. The 787 program exited the year at a production rate of five per month and recently announced plans to expand South Carolina operations. In January, the 777X program resumed FAA certification flight testing, and the company still anticipates first delivery of the 777-9 in 2026.
Commercial Airplanes booked 204 net orders in the quarter, including 100 737-10 airplanes for Pegasus Airlines and 30 787-9 airplanes for flydubai. Commercial Airplanes delivered 57 airplanes during the quarter and backlog included over 5,500 airplanes valued at $435bn.
Defense, Space & Security
Defense, Space & Security fourth quarter revenue of $5.4bn and operating margin of (41.9) percent reflect the previously announced pre-tax charges of $1.7bn on the KC-46A, T-7A, Commercial Crew, VC-25B and MQ-25 programs.
In January, the U.S. Air Force announced an updated acquisition approach for the T-7A Red Hawk that allows the company to provide a production-ready configuration to the customer prior to low-rate initial production, which better supports the operational needs of the customer and reduces future production risk.
During the quarter, Defense, Space & Security captured an award from the U.S. Air Force for 15 KC-46A Tankers, secured an order for seven P-8A Poseidon aircraft from the U.S. Navy, and delivered the final T-7A Red Hawk engineering and manufacturing development aircraft to the U.S. Air Force. Backlog at Defense, Space & Security was $64bn, of which 29 percent represents orders from customers outside the U.S.
Global Services
Global Services fourth quarter revenue of $5.1bn and operating margin of 19.5 percent reflect higher commercial volume and mix.
During the quarter, Global Services secured awards for C-17 sustainment and a contract for F-15 Japan Super Interceptor upgrade services from the U.S. Air Force.
Unallocated items, eliminations and other primarily reflects timing of allocations.
General Dynamics
29 Jan 25. General Dynamics results beat estimates on defense, bizjet deliveries miss. General Dynamics beat expectations for fourth-quarter results on Wednesday, as strength in the company’s defense businesses offset persistent supply issues holding back jet deliveries.
The Russia-Ukraine war and the escalation of conflicts in the Middle East fueled demand for weapons and military vehicles during the quarter. The company’s three defense segments – combat systems, marine and technologies – posted revenue growth of 1.3%, 16.2% and 2.8%, respectively.
Revenue in the aerospace unit, which makes Gulfstream business jets, jumped 36.4%, even though supply of jet engines has been held up by longer certification times, keeping General Dynamics from completing deliveries on schedule.
The company delivered 136 aircraft during the year, lower than its revised October estimate of 150 aircraft. Its book-to-bill ratio of 0.9-to-1 for the quarter suggests billing was slightly higher than new orders received. (Source: Reuters)
29 Jan 25. General Dynamics (NYSE: GD) today reported quarterly net earnings of $1.1bn, up 14.2% from the year-ago quarter, on revenue of $13.3 bn, up 14.3% over the year-ago quarter. Diluted earnings per share (EPS) was $4.15, up 14% from the year-ago quarter.
For the full year, net earnings were $3.8bn, up 14.1% from 2023, on revenue of $47.7bn, up 12.9% from 2023. Diluted EPS for the full year was $13.63, up 13.4% from 2023.
- Fourth-quarter net earnings of $1.1bn, diluted EPS of $4.15, on $13.3bn in revenue
- Full-year net earnings of $3.8bn, diluted EPS of $13.63, on $47.7bn in revenue
- $2.2bn net cash provided by operating activities in the quarter, 188% of net earnings
- Ended the year with $90.6bn in backlog
“We had a solid fourth quarter, capping off a year that saw steady growth in revenue and earnings across all four segments,” said Phebe N. Novakovic, chairman and chief executive officer. “Order activity continued to be very strong, with 1-to-1 book-to-bill for the year, even as revenue grew by 13%, positioning us well for continued growth.”
Gulfstream delivered 47 aircraft in the quarter, of which 42 were large-cabin aircraft. The company delivered a total of 136 aircraft during the year, of which 118 were large-cabin aircraft.
Cash
Net cash provided by operating activities in the quarter totaled $2.2bn, or 188% of net earnings. For the year, net cash provided by operating activities totaled $4.1bn, or 109% of net earnings.
During the year, the company invested $916 m in capital expenditures, made tax payments of $560m, repaid fixed rate notes of $500 m, and returned $3 bn to shareholders through dividends and share repurchases, ending 2024 with $1.7bn in cash and equivalents on hand.
Backlog
Orders remained strong across the company with a consolidated book-to-bill ratio, defined as orders divided by revenue, of 0.9- to-1 for the quarter and 1-to-1 for the year. The company ended the year with backlog of $90.6bn and estimated potential contract value, representing management’s estimate of additional value in unfunded indefinite delivery, indefinite quantity (IDIQ) contracts and unexercised options, of $53.4bn. Total estimated contract value, the sum of all backlog components, was $144bn at year end, up 9.1% from a year earlier.
In the Aerospace segment, orders in the quarter totaled $3.8bn. Backlog at the end of the year was $19.7bn. Aerospace book-to-bill was 1-to-1 for the quarter and the year.
In the three defense segments, significant awards in the quarter include a U.S. Air Force contract with maximum potential value of $5.6 bn to modernize, integrate and operate the Department of Defense’s Mission Partner Environments (MPEs); a U.S. Space Force contract with maximum potential value of $2.2bn to provide sustainment services for the Mobile User Objective System (MUOS) satellite communications system; $1.9bn from the U.S. Navy for multiple contracts to provide services, materials and parts for Virginia-class submarines; $370 m from the U.S. Army for the production of 155mm artillery projectile metal parts; contracts for various munitions and ordnance with maximum potential value of $820m; and several key contracts for classified customers with maximum potential value of $1.4bn.
Lockheed Martin
28 Jan 25. Lockheed hit by $2bn in charges on 2 classified programs.
The world’s largest defense contractor recorded total year end losses of $1.4bn on a classified program in its missiles and fire control (MFC) portfolio as well as $555m overrun on a program in its aeronautics division, Lockheed said in a news release.
Higher than expected engineering costs and other difficulties forced Lockheed Martin to book $2bn in losses on two classified programs in 2024, with a $1.7bn hit occurring in the final quarter of the year, the company said in results today.
The world’s largest defense contractor recorded total year end losses of $1.4bn on a classified program in its missiles and fire control (MFC) portfolio as well as a $555m overrun on a program in its aeronautics division, Lockheed said in a news release. Of that sum, the MFC program logged a $1.3bn charge in the fourth quarter, with the aeronautics program incurring a $410m charge during the same period.
The MFC program losses stem from a contract where Lockheed can be reimbursed for costs during the initial phase of the program, but where follow-on contract options are locked under a fixed-price deal that holds Lockheed responsible for paying costs above a certain threshold. Lockheed estimates that all options exercised over the “next several years” would be performed at a loss to the company, with the first $100m charge occurring in the first quarter of 2024.
“During the fourth quarter of 2024, the company again assessed the likelihood that additional options may be exercised and now believe it is probable that all options will be exercised based on performance to date, future requirements of the program, discussions with the customer and suppliers, and anticipated customer funding, among other factors, resulting in the recognition of additional losses,” Lockheed said in a release.
When Lockheed executives first disclosed the hit to the MFC program in April, CEO Jim Taiclet characterized the program as a long-running franchise that will deliver a strong return on investment after going through a period of teething pains, while Chief Financial Officer Jay Malave said the effort was expected to become profitable on an annual basis around the 2028 timeframe.
Meanwhile, Lockheed described the impacted aeronautics program as a fixed-price incentive fee contract involving “highly complex design and systems integration.” The company conducted a review of the program due to undisclosed near-term milestones and trends experienced in the fourth quarter, and recorded losses based on “higher projected costs in engineering and integration activities that are necessary to achieve those forthcoming milestones,” it said.
Because of the classified program losses, Lockheed’s target earnings per share for 2024 amounted to $22.31. It recorded $5.3bn in free cash flow for 2024. Net sales increased 5% to $71bn.
“2024 was another successful and productive year for Lockheed Martin,” Taiclet said in a statement accompanying results. “Our 5% sales growth and record year-end backlog of $176 bn demonstrate the enduring global demand for our advanced defense technology and systems.”
The company expects net sales of about $73.7bn to $74.7bn in 2025, with a free cash flow target of around $6.6bn to $6.8bn. (Source: glstrade.com/Breaking Defense.com)
28 Jan 25. Lockheed Martin Reports Fourth Quarter and Full Year 2024 Financial Results.
- 2024 net sales increased 5% to $71.0bn
- Recorded pre-tax losses of $1.7bn and $2.0bn associated with classified programs in the fourth quarter and full year, which impacted earnings per share by $5.45 and $6.16
- Earnings per share of $2.22 in the fourth quarter and $22.31 in 2024, including impact of classified programs losses
- Cash from operations of $7.0bn and free cash flow of $5.3bn in 2024 after a pension contribution of $990m
- Returned $6.8bn of cash to shareholders through dividends and share repurchases in 2024
- Record backlog of $176.0bn at end of 2024
- 2025 financial outlook provided
Lockheed Martin Corporation [NYSE: LMT] today reported fourth quarter 2024 net sales of $18.6bn, compared to $18.9bn in the fourth quarter of 2023. Net earnings in the fourth quarter of 2024 were $527m, or $2.22 per share, including $1.7bn ($1.3 bn, or $5.45 per share, after-tax) of losses for classified programs, compared to $1.9bn, or $7.58 per share, in the fourth quarter of 2023. Cash from operations was $1.0bn in the fourth quarter of 2024, after a pension contribution of $990m, compared to $2.4bn in the fourth quarter of 2023. Free cash flow was $441m in the fourth quarter of 2024, after a pension contribution of $990m, compared to $1.7bn in the fourth quarter of 2023. Fourth quarter 2024 results included 13 weeks, compared to 14 weeks for fourth quarter 2023, which had an unfavorable impact on sales volume across the company.
Net sales in 2024 were $71.0bn, compared to $67.6 bn in 2023. Net earnings in 2024 were $5.3bn, or $22.31 per share, including $2.0bn ($1.5bn, or $6.16 per share, after-tax) of losses for classified programs, compared to $6.9bn, or $27.55 per share, in 2023. Cash from operations was $7.0bn in 2024, after a pension contribution of $990 m, compared to $7.9bn in 2023. Free cash flow was $5.3bn in 2024, after a pension contribution of $990m, compared to $6.2bn in 2023.
“2024 was another successful and productive year for Lockheed Martin. Our 5% sales growth and record year-end backlog of $176bn demonstrate the enduring global demand for our advanced defense technology and systems,” said Jim Taiclet, Lockheed Martin’s Chairman, President and CEO. “In the year, we invested over $3bn in advancing our nation’s security through research and development and capital investment to support our customers’ missions, drive innovation and transform our operations with the latest digital and manufacturing technologies. Our strong and consistent performance also enabled us to again return greater than 100% of free cash flow to our shareholders in 2024.”
“We also continue to drive collaboration across government and all sectors of American industry to accelerate innovation, improve resilience and integrate emerging technologies to deter, and if necessary to win any potential armed conflict,” continued Taiclet.
“Lockheed Martin is committed to developing and delivering the best military capabilities in the world, better than any potential adversary can hope to have. One of our most critical investments in 2024 was in ensuring continued air superiority for the United States and its allies. We are fully committed to developing a combined air power solution set that integrates new 6th generation with current 5th generation and 4th generation aircraft using wingman drones, AI, advanced sensors in space and in the air, and 5G-level, cyber-hardened data links. Our leading technical and manufacturing capabilities, the innovative spirit that originated in our Skunk Works® operation, our incredibly capable workforce, along with the derisking actions we executed in the fourth quarter, position us well for strong performance in 2025. We look forward to working with the incoming administration to best serve our customers with highly reliable, theater-level mission solutions that can win wars while delivering compelling results to our shareholders.”
Earnings Impacts of Classified Program Losses and Other Items
During the fourth quarter of 2024, the company recognized losses associated with existing classified programs at its Aeronautics and
Business segments.
Aeronautics
The company’s Aeronautics business segment has an existing classified fixed-price incentive fee contract that involves highly complex design and systems integration. The program includes a base contract for the initial phase of the program and multiple options for additional phases. The company previously disclosed it continues to monitor the technical requirements and its performance, the remaining work and any future changes in scope or schedule, and estimated costs to complete the program, and it may have to record additional losses in future periods if further performance issues, increases in scope, or cost growth occur. As a result of performance trends experienced in the fourth quarter 2024 and in contemplation of near-term program milestones, the company performed a comprehensive review of the program requirements, technical complexities, schedule, and risks. Based on that review, the company has identified higher projected costs in engineering and integration activities that are necessary to achieve those forthcoming milestones and recognized losses across the program phases of $410m in the fourth quarter of 2024. As of December 31, 2024, losses for the year were approximately $555m, including the fourth quarter loss.
Missiles and Fire Control (MFC)
The company’s MFC business segment has an existing classified contract, which includes a cost-reimbursable base contract for the initial phase of the program and multiple fixed-price options for additional phases. The company previously disclosed the options may be exercised over the next several years and if performed expects they would each be at a loss. During the first quarter of 2024, the company concluded it was probable that the first option would be exercised and recognized a loss of approximately $100 m. During the fourth quarter of 2024, the company again assessed the likelihood that additional options may be exercised and now believe it is probable that all options will be exercised based on performance to date, future requirements of the program, discussions with the customer and suppliers, and anticipated customer funding, among other factors, resulting in the recognition of additional losses of approximately $1.3bn, which is consistent with the amount the company previously disclosed. For the year ended Dec. 31, 2024, MFC recognized losses of $1.4bn for this program, including the fourth quarter loss.
Cash Flows and Capital Deployment Activities
The decrease in operating and free cash flows in the quarter and year ended Dec. 31, 2024 compared to the same period in 2023 were primarily due to a pension contribution of $990m.
The company’s cash activities in the quarter and year ended 2024, included the following:
- paying cash dividends of $778m and $3.1bn during the quarter and year ended Dec. 31, 2024;
- paying $1.0bn to repurchase 1.8 m shares and $3.7bn to repurchase 7.5m shares during the quarter and year ended Dec. 31, 2024;
- making a pension contribution of $990 m during the quarter and year ended Dec. 31, 2024;
- making a long-term debt scheduled repayment of $168 m during the year ended Dec. 31, 2024; and
- receiving net proceeds from debt issuances of approximately $1.0bn and $3.0bn during the quarter and year ended Dec. 31, 2024.
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.
RMS
RMS’ net sales in the fourth quarter of 2024 decreased $450m, or 10%, compared to the same period in 2023. The decrease was primarily attributable to lower net sales of $170m on Sikorsky helicopter programs due to the sales impact of unfavorable profit rate adjustments and lower production volume on the Seahawk program and lower production volume on the Combat Rescue Helicopter (CRH) program; $150m for integrated warfare systems and sensors (IWSS) programs due to lower volume on Aegis; and $75m for various C6ISR programs due to lower volume.
RMS’ operating profit in the fourth quarter of 2024 decreased $66m, or 11%, compared to the same period in 2023. The decrease in operating profit was attributable to $80m of lower profit booking rate adjustments. The decrease in profit booking rate adjustments was due to unfavorable profit rate adjustments on the Seahawk production program.
RMS’ net sales in 2024 increased $1.0bn, or 6%, compared to the same period in 2023. The increase was primarily attributable to higher net sales of $750m on IWSS programs due to higher volume on radar programs, the Canadian Surface Combatant (CSC) program and new program ramp up within the laser systems portfolio; $175m for various C6ISR programs due to higher volume; and $140m for Sikorsky helicopter programs due to higher production volume on the CH-53K program, partially offset by lower volume on the VH-92A program.
RMS’ operating profit in 2024 increased $56m, or 3%, compared to the same period in 2023. The increase in operating profit was attributable to $115m from higher volume described above and $85m from favorable contract mix and cost recoveries, partially offset by $155m of lower profit booking rate adjustments. The decrease in profit booking rate adjustments was due to unfavorable profit rate adjustments on the Seahawk production program, partially offset by the net impact in 2023 of both a $100m unfavorable profit rate adjustment on Canadian Maritime Helicopter Program (CMHP) and a $65m favorable profit rate adjustment on an international surveillance and control program that did not recur in 2024.
Space
Space’s net sales in the fourth quarter of 2024 decreased $439m, or 13%, compared to the same period in 2023. The decrease was primarily attributable to lower net sales of $360m for national security space programs primarily due to lower volume on Next Generation Overhead Persistent Infrared (Next Gen OPIR) and classified programs; and $75m for commercial civil space due to lower volume on the Orion program.
Space’s operating profit in the fourth quarter of 2024 decreased $24m, or 8%, compared to the same period in 2023. The decrease was primarily attributable to $45m of lower profit booking rate adjustments, partially offset by $15m of higher equity earnings driven by higher launch volume from the company’s investment in United Launch Alliance (ULA). The decrease in profit booking rate adjustments was due to lower favorable profit rate adjustments on classified and hypersonics programs.
Space’s net sales in 2024 decreased $126m, or 1%, compared to the same period in 2023. The decrease was primarily attributable to lower net sales of $320m for national security space programs due to lower volume on classified programs and $145m for commercial civil space due to lower volume on the Orion program, partially offset by higher volume on other space exploration programs. These decreases were partially offset by higher net sales of $255m for strategic and missile defense programs due to higher volume on FBM and reentry programs.
Space’s operating profit in 2024 increased $68m, or 6%, compared to the same period in 2023. The increase was primarily attributable to $100m related to favorable contract mix and cost recoveries across the portfolio, partially offset by $55m of lower profit booking rate adjustments due to lower net favorable profit rate adjustments on the Orion program and $25m of higher equity earnings driven by higher launch volume from the company’s investment in ULA.
Total equity earnings (ULA) represented approximately $15m, or 5% and $45m, or 4% for the quarter and year ended Dec. 31, 2024. Total equity earnings for the quarter ended Dec. 31, 2023 was not significant and $20m, or 2% for the year ended Dec. 31, 2023.
Income Taxes
The company’s effective income tax rate was (1.5)% and 13.0% for the quarters ended Dec. 31, 2024 and 2023. The lower effective income tax rate is due to lower pre-tax earnings, as a result of the classified programs losses previously described, which reduced the effective income tax rate by 18.6% for the quarter ended Dec. 31, 2024. The company’s effective income tax rate was 14.2% and 14.5% for the years ended Dec. 31, 2024 and 2023. The classified program losses previously described reduced pre-tax earnings and reduced the effective income tax rate by 2.0% for the year ended Dec. 31, 2024. The rates for all periods benefited from tax deductions for foreign derived intangible income, research and development tax credits, dividends paid to the company’s defined contribution plans with an employee stock ownership plan feature and employee equity awards.
Business segment operating profit
Business segment operating profit represents operating profit from the company’s business segments before unallocated income and expense. This measure is used by the company’s senior management in evaluating the performance of its business segments and is a performance goal in the company’s annual incentive plan. Business segment operating margin is calculated by dividing business segment operating profit by sales. The table below reconciles the non-GAAP measure business segment operating profit with the most directly comparable GAAP financial measure, consolidated operating profit.
Free cash flow is cash from operations less capital expenditures. The company’s capital expenditures are comprised of equipment and facilities infrastructure and information technology (inclusive of costs for the development or purchase of internal-use software that are capitalized). The company uses free cash flow to evaluate its business performance and overall liquidity and it is a performance goal in the company’s annual and long-term incentive plans. The company believes free cash flow is a useful measure for investors because it represents the amount of cash generated from operations after reinvesting in the business and that may be available to return to stockholders and creditors (through dividends, stock repurchases and debt repayments) or available to fund acquisitions or other investments. The entire free cash flow amount is not necessarily available for discretionary expenditures, however, because it does not account for certain mandatory expenditures, such as the repayment of maturing debt and future pension contributions.
Northrop Grumman
30 Jan 25. Northrop posts quarterly profit vs year-ago loss on surge in military equipment demand. U.S. defense company Northrop Grumman (NOC.N), posted a quarterly profit on Thursday, from a year-ago loss, as headwinds from its B-21 Raider stealth bomber program eased and rising geopolitical tensions stoked demand for its military equipment.
The ongoing conflicts in the Middle East and the Russia-Ukraine war have increased demand for arms across the world and has benefited U.S. defense contractors.
However, a rise in costs owing to a slower recovery in pandemic-related supply chain snags have dented margins for companies in the sector.
Northrop expects sales in 2025 to be between $42bn and $42.5bn, slightly short of analysts’ average estimate of $42.8bn according to data compiled by LSEG.
It expects an adjusted per-share profit of between $27.85 and $28.25 for the year, the midpoint of which is in line with expectations. (Source: Google/Reuters)
30 Jan 25. Northrop Grumman Corporation (NYSE: NOC) reported fourth quarter 2024 sales of $10.7bn were comparable with the fourth quarter of 2023. Sales increased 4 percent to $41.0bn in 2024, as compared with $39.3 bn in 2023. 2024 sales reflect continued strong demand for our products and services. Fourth quarter 2024 net earnings totaled $1.3bn, or $8.66 per diluted share, and 2024 net earnings were $4.2bn, or $28.34 per diluted share.
Results
- Strong 2024 financial results that met or exceeded company-level financial guidance:
◦ Book to bill ratio of 1.23; backlog rises to new record of $91.5bn
◦ Sales increase 4.4 percent to $41.0bn
◦ Operating margin rate of 10.6 percent; segment operating margin rate1 of 11.1 percent
◦ Diluted EPS of $28.34; Mark-to-Market (MTM)-adjusted EPS1 of $26.08
◦ Operating cash flow of $4.4bn; free cash flow1 of $2.6bn
◦ Returned $3.7bn of cash to shareholders through share repurchases and dividends
- 2025 financial guidance in line with prior outlook, including continued organic sales1 growth, margin expansion, and double digit free cash flow1 growth
◦ Includes divestiture of Training Services business, expected to close mid-year
Excluding the after-tax MTM benefit of $332m, fourth quarter 2024 MTM-adjusted net earnings1 totaled $932m, or $6.39 per diluted share, and 2024 MTM-adjusted net earnings1 totaled $3.8bn, or $26.08 per diluted share. “Our team had another outstanding year equipping the U.S. and our allies with the advanced technologies they need to lead globally and maintain peace through strength,” said Kathy Warden, chair, chief executive officer and president. “Our financial results and new record backlog reflect the relevance of our products and the importance of our work. Over the last five years our sales have grown 30% organically and our free cash flow expanded 25% in 2024. Our guidance anticipates continued top line growth, margin expansion, and double digit cash flow growth. Northrop Grumman remains committed to leading the way in technology innovation for national security.”
MTM-adjusted Net Earnings and EPS1 Net earnings for the fourth quarter and full year 2024 were increased by a $332m aftertax MTM benefit. The MTM benefit relates to pension and other post-retirement benefits (OPB) actuarial gains and losses, which the company recognizes immediately through earnings upon annual remeasurement of the assets and projected benefit obligations of our pension and OPB plans. MTM-adjusted earnings1 and EPS1 are the measures the company uses to compare performance to prior periods and for EPS guidance.
Sales
Fourth quarter 2024 sales were comparable to the prior year period and reflect higher sales at Aeronautics Systems, Defense Systems and Mission Systems, offset by lower sales at Space Systems largely driven by a reduction of $231m associated with wind-down of work on the restricted space and NGI programs, as previously disclosed. 2024 sales increased $1.7bn, or 4 percent, due to a 12 percent growth in sales at Aeronautics Systems and higher sales at Mission Systems and Defense Systems, partially offset by lower sales at Space Systems largely driven by a reduction of $595m associated with wind-down of work on the restricted space and NGI programs, as previously disclosed. Operating Income and Margin Rate Fourth quarter 2024 operating income increased $1.5bn primarily due to higher operating income at Aeronautics Systems largely driven by the prior year $1.56bn charge on the B-21 program, as well as higher operating income at Defense Systems. These increases were partially offset by $122m of higher unallocated corporate expense, largely due to a $127m increase in deferred state tax expense related to the MTM benefit (expense) and prior year B-21 charge. Fourth quarter 2024 operating margin rate increased to 10.2 percent from (3.7) percent reflecting the items above. 2024 operating income increased $1.8bn, or 72 percent, primarily due to higher operating income at Aeronautics Systems, largely driven by the prior year $1.56bn charge on the B-21 program, as well as higher operating income at Space Systems and Defense Systems. 2024 operating income also increased due to a $122m increase in the FAS/CAS operating adjustment, partially offset by $73m of higher unallocated corporate expense, largely due to a $127m increase in deferred state taxes related to the MTM benefit (expense) and prior year B-21 charge and $25m of lower intangible amortization and PP&E step-up depreciation. 2024 operating margin rate increased to 10.6 percent from 6.5 percent reflecting the items above. Segment Operating Income and Margin Rate1 Fourth quarter 2024 segment operating income1 increased $1.6bn primarily due to the prior year B-21 charge at Aeronautics Systems, as well as higher operating income at Defense Systems. Segment operating margin rate1 increased to 11.2 percent reflecting higher operating margin rates at Aeronautics Systems, Space Systems and Defense Systems. 2024 operating margin rate increased to 10.6 percent from 6.5 percent reflecting the items above.
Segment Operating Results Effective July 1, 2024, the company realigned the Strategic Deterrent Systems (SDS) division, which includes the Sentinel program, from Space Systems to Defense Systems. This realignment is reflected in the financial information contained in this report.
Effective January 1, 2025, the company realigned the Strike and Surveillance Aircraft Solutions (SSAS) business unit from Defense Systems to Aeronautics Systems. This realignment is not reflected in the financial information contained in this release (except as it pertains to the company’s 2025 guidance). The realignment will be reflected in the company’s operating results beginning in the first quarter of 2025. Recast financial information reflecting these two realignments for current and certain prior periods is presented in Schedule 6 of this release.
AERONAUTICS SYSTEMS
Three Months Ended December 31
Sales
Fourth quarter 2024 sales increased $310m, or 11 percent, primarily due to the continuing transition to production on B-21 driving higher restricted volume and a $134m increase on F-35 production programs largely driven by the timing of materials. 2024 sales increased $1.2 bn, or 12 percent, primarily due to the continuing transition to production on B-21 driving higher restricted volume, a $448m increase in F-35 production and sustainment volume due, in part, to the timing of materials, a $134m increase in Triton LRIP production volume, a $134m increase in E-2 fleet sustainment and modernization work, and higher volume on Global Hawk sustainment activities. Operating Income Fourth quarter 2024 operating income increased $1.6bn due to the prior year $1.56bn charge on the B-21 program. Operating margin rate increased to 9.1 percent principally due to the prior year B-21 charge, partially offset by sales growth on low margin restricted programs. 2024 operating income increased $1.7bn primarily due to the prior year $1.56bn charge on the B-21 program as well as higher sales. Operating margin rate increased to 9.8 percent principally due to the prior year B-21 charge.
DEFENSE SYSTEMS
Three Months Ended December 31
Sales
Fourth quarter 2024 sales increased $271m, or 3 percent, primarily due to a $182m increase on Sentinel as that program continues to ramp, a $163m increase on certain military ammunition programs, a $124m increase on Stand-in Attack Weapon (SiAW) as the program ramps and higher volume from timing of materials and increased order quantities on the Guided Multiple Launch Rocket System (GMLRS) program. These increases were partially offset by a $262m decrease due to the completion of an international training program and lower volume on the Special Electronic Mission Aircraft (SEMA) program as it nears completion. Operating Income Fourth quarter 2024 operating income increased $28m, or 13 percent, due to a higher operating margin rate and higher sales. Operating margin rate increased to 10.8 percent from 10.0 percent principally due to higher net EAC adjustments. 2024 operating income increased $37m, or 4 percent, primarily due to higher sales. Operating margin rate was comparable to the prior period.
MISSION SYSTEMS
Three Months Ended December 31
Sales
Fourth quarter 2024 sales increased $81m, or 3 percent, primarily due to higher volume on restricted advanced microelectronics and technology programs, as well as higher volume on communications, electronic warfare self-protection and targeting systems programs. These increases were partially offset by lower sales on restricted airborne radar programs. 2024 sales increased $504m, or 5 percent, primarily due to higher volume on restricted advanced microelectronics and technology programs, increased marine systems sales due, in part, to the timing of materials, and higher Ground/Air Task Oriented Radar (G/ATOR) volume due to continued ramp-up on full-rate production (FRP) awards. These increases were partially offset by lower sales on restricted airborne radar programs and the Scalable Agile Beam Radar (SABR) program. Operating Income Fourth quarter 2024 operating income increased $7m, or 2 percent, primarily due to higher sales. Operating margin rate decreased to 14.9 percent from 15.1 percent principally driven by lower margin rates on certain airborne radar programs and changes in contract mix toward more cost-type content, which more than offset higher net EAC adjustments. 2024 operating income decreased $11m, or 1 percent, due to a lower operating margin rate, partially offset by higher sales. Operating margin rate decreased to 14.0 percent from 14.8 percent primarily due to lower net EAC adjustments on certain airborne radar production programs due, in part, to production inefficiencies that have driven higher labor costs, as well as changes in contract mix toward more cost-type content. These decreases were partially offset by sales growth on higher margin advanced microelectronics programs.
SPACE SYSTEMS
Sales
Fourth quarter 2024 sales decreased $388m, or 13 percent, primarily due to wind-down of work on the restricted space and NGI programs, which reduced sales by $231m, as well as lower volume on a restricted program and Next-Gen OPIR and the Glide Phase Interceptor program, largely due to timing. 2024 sales decreased $142m, or 1 percent, primarily due to wind-down of work on the restricted space and NGI programs, which reduced sales by $595m. This reduction was partially offset by a $302m increase on Space Development Agency (SDA) satellite programs and a $130m increase on the Habitation and Logistics Outpost (HALO) program. Operating Income Fourth quarter 2024 operating income decreased $15m, or 5 percent, due to a higher operating margin rate, partially offset by lower sales. Operating margin rate increased to 10.1 percent from 9.4 percent principally due to an improvement in net EAC adjustments largely driven by the prior year including a $42m unfavorable EAC adjustment on the HALO program. 2024 operating income increased $124m, or 11 percent, primarily due to a higher operating margin rate. Operating margin rate increased to 10.7 percent from 9.5 percent primarily due to higher net EAC adjustments largely driven by the HALO program as previously disclosed.
RTX
29 Jan 25. RTX finishes 2024 strong, eyes continued growth in 2025. RTX saw strong performance in 2024 and anticipates further growth in 2025, Christopher Calio, president and CEO of RTX, said in an earnings call on 28 January. The company recorded USD80.8bn in adjusted sales, 11% organic growth over 2023, driven by 14% growth in commercial original equipment, 13% in commercial aftermarket, and 9% in defence, he added.
Demand remains robust, with the company recording USD112 bn in new awards in 2024 and ending the year with a backlog of more than USD218 bn, up 11% year on year, Calio said. Commercial backlog reached USD125 bn, while defence totalled a “record USD93bn”, he added.
In the fourth quarter of 2024, RTX achieved adjusted sales of USD21.6bn or 9% adjusted growth. Growth was led by commercial aftermarket, up 15%, and defence, which was up 10% organically, Neil Mitchill Jr, chief financial officer for RTX, said during the call. Commercial original equipment saw 10% growth.
Free cash flow totalled USD492m, bringing the total for the year to USD4.5bn. The figure was affected by USD2.6bn in costs related to legal matters, powder metal issues with Pratt & Whitney engines, and a previously disclosed contract issue, Mitchill added.
Segment results
In the fourth quarter, Collins Aerospace recorded USD7.5 bn in adjusted sales for 8% growth, including 13% growth in defence, attributed to higher volume over several programmes, Nathan Ware, vice-president of investor relations at RTX, said during the call. Over 2024 Collins Aerospace generated USD28.3bn of adjusted sales. (Source: Janes)
28 Jan 25. RTX (NYSE: RTX) reports fourth quarter 2024 results and announces 2025 outlook.
Fourth quarter 2024
- Sales of $21.6bn, up 9 percent versus prior year, and up 11 percent organically* excluding divestitures
- GAAP EPS was $1.10 and included $0.30 of acquisition accounting adjustments and $0.14 of restructuring and other net significant and/or non-recurring charges
- Adjusted EPS* of $1.54, up 19 percent versus prior year
- Operating cash flow of $1.6bn; free cash flow* of $0.5bn
- Company backlog of $218bn; including $125bn of commercial and $93 bn of defense
- Returned $852m of capital to shareowners
Full year 2024
- Reported sales of $80.7bn
- Adjusted sales* of $80.8bn, up 9 percent versus prior year, and up 11 percent organically* excluding divestitures
- GAAP EPS was $3.55 and included $1.20 of acquisition accounting adjustments and $0.98 of restructuring and other net significant and/or non-recurring charges
- Adjusted EPS* of $5.73, up 13 percent versus prior year
- Operating cash flow of $7.2bn; free cash flow* of $4.5bn
- Returned $3.7bn of capital to shareowners, returning over $33bn since the merger
Outlook for full year 2025
- Adjusted sales* of $83.0 – $84.0bn, including 4 to 6 percent organic growth*
- Adjusted EPS* of $6.00 – $6.15
- Free cash flow* of $7.0 – $7.5bn
“RTX delivered a very strong year of performance in 2024 with 11 percent organic sales growth* and 13 percent adjusted EPS growth*, including segment margin expansion* in all three businesses,” said RTX President and CEO Chris Calio. “We have strong momentum heading into 2025 with a $218bn backlog and unprecedented demand for our products and solutions. We remain focused on advancing our strategic priorities of executing on our commitments, innovating for growth and harnessing the breadth and scale of RTX, giving us confidence in our 2025 financial outlook.”
Fourth quarter 2024
RTX reported fourth quarter sales of $21.6bn, up 9 percent over the prior year. GAAP EPS of $1.10 included $0.30 of acquisition accounting adjustments, $0.05 of restructuring, and $0.09 of other net significant and/or non-recurring charges. Adjusted EPS* of $1.54 was up 19 percent versus the prior year.
The company reported net income attributable to common shareowners in the fourth quarter of $1.5bn which included $408m of acquisition accounting adjustments, $61m of restructuring, and $120m of other net significant and/or non-recurring charges. Adjusted net income* of $2.1bn was up 18 percent versus the prior year driven by growth in adjusted segment operating profit*, partially offset by higher taxes and lower pension income. Operating cash flow in the fourth quarter was $1.6bn. Capital expenditures were $1.1bn, resulting in free cash flow* of $0.5bn.
Collins Aerospace
Collins Aerospace had fourth quarter 2024 reported sales of $7,537m, up 6 percent versus the prior year. The increase in sales was driven by a 13 percent increase in defense and a 12 percent increase in commercial aftermarket, partially offset by a 6 percent decrease in commercial OE. The increase in defense sales was driven by higher volume across multiple programs and platforms, including new programs awarded in 2024. The increase in commercial aftermarket sales was driven by continued growth in commercial air traffic, and the decrease in commercial OE sales was driven by lower narrow-body volume. Adjusted sales* of $7,537m, were up 8 percent versus the prior year.
Collins Aerospace reported operating profit of $1,106m, down 2 percent versus the prior year. This included a $155m charge related to the impairment of contract fulfillment costs which was partially offset by a $99m gain on the sale of the Hoist & Winch business. Q4 2023 included a benefit of $112m from a customer settlement. On an adjusted basis, operating profit* of $1,207m was up 17 percent versus the prior year. Operationally, the increase was driven by drop through on higher commercial aftermarket and defense volume, which was partially offset by lower commercial OE volume and unfavorable commercial OE mix.
Pratt & Whitney
Pratt & Whitney had fourth quarter 2024 reported and adjusted sales of $7,569m, up 18 percent versus the prior year. The increase was driven by a 31 percent increase in commercial OE, a 17 percent increase in commercial aftermarket, and an 8 percent increase in military. The increase in commercial sales was driven by increased deliveries and favorable OE mix in Large Commercial Engines, and higher commercial aftermarket volume. The increase in military sales was driven by higher volume on F135 production, the F135 Engine Core Upgrade program, and F135 sustainment, which was partially offset by lower sustainment volume across legacy platforms, including the F100 and F117.
Pratt & Whitney reported operating profit of $504m, up 32 percent versus the prior year. The increase was driven by favorable volume and mix in Large Commercial Engines OE, favorable mix in Pratt Canada aftermarket, and drop through on higher commercial aftermarket and military volume. Pratt & Whitney also benefited from an approximately $70m insurance recovery. Reported operating profit included a $157m charge related to a customer bankruptcy. On an adjusted basis, operating profit* of $717m, was up 77 percent versus the prior year.
Raytheon had fourth quarter 2024 reported and adjusted sales of $7,157m, up 4 percent versus the prior year. The increase in sales was driven by higher volume on land and air defense systems, including Global Patriot, NASAMS and counter-UAS programs, as well as higher volume from the restart of contracts with a Middle East customer. This was partially offset by the impact from the divestiture of the Cybersecurity, Intelligence and Services business completed in the first quarter of 2024 and lower volume on air and space defense systems. Excluding the impact of the divestiture, sales were up 10 percent versus the prior year*.
Raytheon reported operating profit of $824m, up 36 percent versus the prior year. The increase was driven by drop through on higher volume, improved net productivity, and favorable mix which was partially offset by the impact from the divestiture of the Cybersecurity, Intelligence and Services business. Reported operating profit included a $102 m benefit related to reserve adjustments associated with the restart of contracts with a Middle East customer. On an adjusted basis, operating profit* of $728m was up 18 percent versus the prior year.
Textron
22 Jan 25. Textron Reports Fourth Quarter 2024 Results; Announces 2025 Financial Outlook.
- EPS of $0.76; adjusted EPS of $1.34
- Full-year adjusted EPS of $5.48
- Full-year share repurchases of $1.1bn
- Aviation backlog of $7.8bn at year-end 2024, up $676m from year-end 2023
- 2025 full-year EPS outlook of $5.19 to $5.39, full year adjusted EPS outlook of $6.00 to $6.20
Textron Inc. (NYSE: TXT) today reported fourth quarter 2024 income from continuing operations of $0.76 per share, as compared to $1.01 per share in the fourth quarter of 2023. Adjusted income from continuing operations, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, was $1.34 per share for the fourth quarter of 2024, compared to $1.60 per share in the fourth quarter of 2023.
“At Bell, we made significant progress on FLRAA achieving Milestone B, which launched the Engineering and Manufacturing Development phase of the program.”
Full year 2024 income from continuing operations was $4.34 per share, down from $4.57 in 2023. Full year 2024 adjusted income from continuing operations was $5.48, as compared to $5.59 in 2023.
“While a work stoppage at Textron Aviation impacted our 2024 financial results, we saw strong order activity, aftermarket growth, and continued new product development activities with the announcement of the Gen3 family of light jets,” said Textron Chairman and CEO Scott C. Donnelly. “At Bell, we made significant progress on FLRAA achieving Milestone B, which launched the Engineering and Manufacturing Development phase of the program.”
Cash Flow
Net cash provided by operating activities of the manufacturing group for the full year was $1.0bn. Manufacturing cash flow before pension contributions, a non-GAAP measure that is defined and reconciled to GAAP in an attachment to this release, totaled $692m for the full year, down from $931m in 2023.
In the quarter, Textron returned $232m to shareholders through share repurchases. Full year 2024 share repurchases totaled $1.1bn.
Outlook
Textron is forecasting 2025 revenues of approximately $14.7bn, up from $13.7bn in 2024. Textron expects full-year 2025 GAAP earnings per share from continuing operations will be in the range of $5.19 to $5.39, or $6.00 to $6.20 on an adjusted basis, which is reconciled to GAAP in an attachment to this release.
The Company is estimating net cash provided by operating activities of the manufacturing group will be between $1.2bn and $1.3bn and manufacturing cash flow before pension contributions, a non-GAAP measure, will be between $800m and $900m, with planned pension contributions of about $50m.
“2024 was a challenging year with a strike at Aviation and difficult end markets in our Industrial segment. Our 2025 outlook of higher revenue and margin reflects a stabilized production line with improved productivity at Textron Aviation, growth across our aerospace and defense businesses driven by new product development, and an improved cost structure at our Industrial segment,” Donnelly concluded.
Fourth Quarter Segment Results
Textron Aviation
Revenues at Textron Aviation of $1.3bn were down $242m from the fourth quarter of 2023, reflecting lower volume and mix of $282m, which was principally a result of production disruptions related to the strike.
Textron Aviation delivered 32 jets in the quarter, down from 50 last year, and 38 commercial turboprops, down from 44 last year.
Segment profit was $100m in the fourth quarter, down $93m from a year ago, primarily due to lower volume and mix, and manufacturing inefficiencies, which included idle facilities costs and higher costs associated with the labor disruption, resulting from the strike.
Textron Aviation backlog at the end of the fourth quarter was $7.8bn, up $219m from the prior quarter.
Bell
Bell revenues were $1.1bn, up $58m from last year’s fourth quarter, reflecting higher military and support program revenues of $67m, primarily due to higher volume on the FLRAA program, partially offset by lower volume on the V-22 program.
Bell delivered 78 commercial helicopters in the quarter, down from 91 last year.
Segment profit of $110m was down $8m from a year ago, primarily driven by mix as lower volume on the V-22 program offset higher volume on the FLRAA program.
Bell backlog at the end of the fourth quarter was $7.5bn.
Textron Systems
Revenues at Textron Systems were $311m, down $3m from last year’s fourth quarter.
Segment profit of $42m was up $7m from last year’s fourth quarter.
Textron Systems’ backlog at the end of the fourth quarter was $2.6bn.
Industrial
Industrial revenues were $869m, down $92m from last year’s fourth quarter, largely reflecting lower volume.
Segment profit of $48m was down $9m from the fourth quarter of 2023, reflecting lower volume and mix and inflation, partially offset by manufacturing efficiencies and lower selling and administrative expense, largely due to cost reduction activities.
Textron eAviation
Textron eAviation segment revenues were $11m in the fourth quarter of 2024, with a segment loss of $22m, largely associated with research and development expense on new products.
Finance
Finance segment revenues were $11m, and profit was $5m in the fourth quarter of 2024.
Restructuring
In December, Textron announced a strategic review of its powersports product line within the Industrial segment that resulted in additional restructuring actions as it indefinitely pauses production of powersports products. With these actions, in the fourth quarter, the Company recorded total pre-tax special charges of $53m and an inventory valuation charge of $38m to write down production-related powersports inventory. (Source: BUSINESS WIRE)