Lockheed Martin (LMT) Financials

Lockheed Martin (NYSE: LMT) has shown a generally positive financial trajectory over the past four years through to Q2 2025, with some fluctuations in key metrics that retail investors should consider.

Positive Highlights:

• Consistently growing total revenues with Q2 2025 revenue at $18.155 billion, showing steady demand for Lockheed Martin's products.
• Net income remains positive and stable, with Q2 2025 net income at $342 million and prior quarters generally reporting healthy profits (e.g., Q1 2025 net income was $1.712 billion).
• Cash and equivalents increased to $1.293 billion in Q2 2025 from $1.803 billion in Q1 2025, indicating reasonable liquidity despite quarterly fluctuations.
• Strong operating cash flow in Q2 2025 of $201 million, reflecting cash-generating ability from ongoing operations.
• Lockheed Martin continues significant investments in property, plant, and equipment ($351 million in Q2 2025) supporting future growth and production capacity.
• The company issued $1.449 billion in debt in Q2 2025, indicating confidence in leveraging for growth and expansion while managing the debt position effectively.
• Stable dividend payments maintained at $3.3 per share in Q2 2025, supporting shareholder returns.
• Total assets increased from about $52.88 billion in Q4 2022 to $58.87 billion in Q2 2025, indicating balance sheet growth and asset accumulation over time.
• Goodwill and intangible assets remain significant, suggesting valuable acquisitions or investments in intellectual property enhancing competitive positioning.

Neutral Observations:

• Operating expenses and interest expenses have shown some variability but are generally in line with revenues and business scale.
• Accounts receivable and inventories have grown, which is typical with revenue growth but warrants monitoring for working capital management.
• The company’s equity base has fluctuated, with total common equity standing at $5.334 billion in Q2 2025 compared to $6.683 billion in Q1 2025, reflecting share repurchases and earnings retention strategies.
• Short-term debt rose to $3.118 billion in Q2 2025 from $1.643 billion in Q1 2025, indicating short-term borrowing changes which could impact liquidity management strategies.
• Interest and investment income appear volatile, with some quarters showing negative values reflecting market or investment performance.

Areas of Concern / Negative Trends:

• Net cash from operating activities dropped significantly from $1.409 billion in Q1 2025 to $201 million in Q2 2025, indicating weaker cash flow generation recently.
• Significant share repurchases continue, with $500 million repurchased in Q2 2025, reducing equity and possibly increasing financial leverage risks if not balanced with earnings growth.
• Dividends paid remain high, with $771 million paid in Q2 2025, which could pressure free cash flow if earnings weaken.
• Total liabilities increased sharply from $43.6 billion in Q1 2023 to over $53.5 billion in Q2 2025, raising concerns about leverage and debt servicing in a rising rates environment.
• The net change in cash & equivalents in Q2 2025 was negative $510 million, indicating cash outflows that may tighten liquidity.

In summary, Lockheed Martin shows a solid revenue base and continued profitability with strategic reinvestments and shareholder returns. However, investors should watch operational cash flow trends, rising liabilities, and capital allocation choices like share buybacks that may affect financial flexibility. Careful monitoring of these factors alongside overall macroeconomic and defense spending conditions is advised.