Why did LMT's earnings fluctuate in 2024?

Lockheed Martin's earnings fluctuated in 2024 due to a combination of factors: 1. **Revenue Growth**: The company's revenue grew by 1.3% in Q3 2024 and 8.6% in Q2 2024, compared to the previous year's corresponding quarters. This indicates a general upward trend in sales, which could contribute to increased earnings. 2. **Operating Margin and Gross Margin**: The operating margin expanded by 20 points to 10.9% in Q3 2024, and the gross margin was 9.75% as of December 31, 2024. These margin improvements suggest that the company is becoming more efficient in its operations, which can lead to higher profits. 3. **Net Income and EPS**: Despite the revenue growth, the net income in Q3 2024 decreased by 3.6% compared to the same quarter in the previous year. Additionally, the diluted EPS in Q4 2024 decreased by 0.18%. These fluctuations in net income and EPS indicate that while revenue may be increasing, the company's earnings are not keeping up at the same rate. 4. **Expense Factors**: The decrease in profit margin in Q2 2024 was driven by higher expenses. This suggests that increased costs may be impacting the company's earnings, even with revenue growth. 5. **Contract Delays and Program Challenges**: Delays in F-35 Lot 18/19 contract negotiations and challenges with the F-35 Tech Refresh 3 have affected the company's performance. These program-specific issues may contribute to fluctuations in earnings. In conclusion, Lockheed Martin's earnings fluctuated in 2024 due to a combination of revenue growth, margin improvements, and expense factors, as well as program-specific challenges. The net effect of these factors resulted in a decrease in net income and EPS for certain quarters.