Lockheed Martin Corp ( LMT ) shares are trading lower after the company reported mixed fourth-quarter 2024 results.

The company reported a net sales decline of 1.3% year-over-year to $18.622 billion, missing the consensus of $18.91 billion. LMT reported Adjusted EPS of $7.67, beating the consensus of $6.64.

The gross margin contracted 845 bps to 3.7%, and the gross profit fell 70% year over year to $690 million.

Aeronautics sales were $8.009 billion (+5% YoY), and the operating margin was 5.4%, down from 10% YoY. Missiles and Fire Control sales of $3.412 billion (+8% YoY); operating margin was (23.6%), down from 12.5% YoY.

Rotary and Mission Systems sales of $4.261 billion (-10% YoY); operating margin 12%, down 30 bps. Space net sales of $2.94 billion (-13% YoY); operating margin 9.6%, up 50 bps.

Lockheed Martin ( LMT ) generated an operating cash flow of $6.972 billion for fiscal 2024, compared to $7.920 billion a year ago. Free cash flow was $5.287 billion.

At the end of the quarter, LMT’s total backlog was $176.04 billion, an increase of 9.6% from December 31, 2023. In 2024, LMT returned $6.8 billion of cash to shareholders through dividends and share repurchases.

The company spent $1 billion to repurchase 1.8 million shares during the fourth quarter and $3.7 billion to buy back 7.5 million shares over the entire year ending December 31, 2024.

“In the year, we invested over $3 billion 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,” commented Jim Taiclet, Lockheed Martin’s Chairman, President, and CEO.

“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.

“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,” concluded Taiclet.

2025 Outlook: Lockheed Martin ( LMT ) expects net sales of $73.75 billion—$74.75 billion versus the consensus of $74.01 billion.

LMT projects EPS for the fiscal of ~$27-$27.30 versus the consensus of $27.91.

The company sees Business segment operating profit of $8.10 billion—$8.20 billion, cash from operations of $8.50 billion—$8.70 billion, and free cash flow of $6.6 billion—$6.8 billion.

Price Action: LMT shares are trading lower by 7.6% at $465.40 at the last check Tuesday.