With a land war in Europe, a Red Sea conflict escalating by the day, and China's naval buildup causing nerves to jangle across Southeast Asia, you might think 2023 would have been a great year to be in the defensive weapons business. For defense contracting giant Lockheed Martin (NYSE: LMT), however, it was rather ho-hum.

Reporting fourth-quarter (and therefore full-year) results last week, Lockheed Martin was forced to admit that 2023 sales inched up only 2.4% in comparison to 2022, to $67.6 billion. On profit, the news was better. As calculated according to generally accepted accounting principles (GAAP), Lockheed earned $6.9 billion, or $27.55 per share, compared with $5.7 billion, or $21.66 per share, in 2022 -- 21% year over year growth, or 27%, depending on how you look at it.

But as regards cash flow, and more importantly free cash flow, the news was depressing again. Operating cash flow grew barely 1%, and free cash flow was up less than 2% at $6.2 billion -- and 10% below reported net income, indicating less than stellar quality of earnings.

Continue reading

Source Fool.com