How Lockheed Martin Makes Money

The aerospace sector is one of the largest in the United States. In fact, the U.S. aerospace industry is the largest in the world, providing the globe with the largest supply of military and civilian equipment. The sector provides supplies to several different markets, including:

• Military aircraft
• Missiles
• Space
• Commercial airliners
• General aviation

Among the leading industries for employment, it relies heavily on research and development (R&D) and manufacturing. So it should come as no surprise that you'll find a great number of engineers working in this sector.

One of the top names in the aerospace industry is Lockheed Martin (LMT). The company is considered a global leader in defense-related equipment, including the F-35 fighter jet and cargo planes. But how does this corporate giant make money? This article provides an overview of the company, its revenue stream, and its financials.

Lockheed Martin: An Overview

Lockheed Martin traces its roots back to the early 1900s shortly after the birth of the aviation industry. The company as it's known today is the result of a merger between the Lockheed Corporation and Martin Marietta. Announced in 1994, the merger was completed in March 1995. It brought together the second- and third-largest defense contractors in the country.

The company is a leading force in the global security and aerospace industry. It is engaged in the research, design, development, manufacturing, integration, and sustainment of advanced technology systems, products, and services. The company also provides management, engineering, cybersecurity, and a range of other services through four main business segments:

• Aeronautics
• Missiles and Fire Control
• Rotary and Mission Systems
• Space

Lockheed competes in the United States and internationally. Some of its major competitors include aircraft manufacturer Boeing (BA), defense firm Raytheon Technologies (RTX), defense and aerospace company BAE Systems, and global defense company Northrop Grumman (NOC).

Lockheed Martin’s Financials

Lockheed Martin's fiscal year ends on December 31 each year. For the 2022 fiscal year, the company reported:

• Net income of $5.73 billion, which was a drop from the $6.31 billion reported in the previous year
• Revenue came in at about $66 billion versus $67.04 billion from 2021
• Operating profit, which it uses as a profitability metric for its individual business segments, also dropped to $8.35 billion from $9.12 billion

The company cited severance-related charges and investment losses as the reason behind the drop in its financials.

Lockheed Martin’s Business Segments

Lockheed Martin operates four main business segments: Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space. The company breaks down its revenue and operating income into the four main segments below.

The total business segment operating profit in FY 2022 was $7.22 billion. The difference between this figure and the company’s consolidated operating profit mentioned above is due to certain items that are not allocated to any of the individual business segments below.

Aeronautics

Lockheed’s Aeronautics business engages in the research, design, development, manufacture, integration, sustainment, support, and upgrade of advanced military aircraft, unmanned air vehicles, and related technologies.

The Aeronautics segment posted $26.99 billion in revenue and $2.87 billion in operating profit in 2022, comprising about 41% of the company’s total revenue and 40% of its total business segment operating profit.

Missiles and Fire Control

This business segment offers a diverse range of products and services, including air and missile defense systems, logistics, fire control systems, mission operations support, engineering support and integration services, manned and unmanned ground vehicles, energy management solutions, and more.

The segment posted $11.32 billion in revenue and $1.64 billion in operating income in 2022, comprising 17% of the company’s total revenue and 23% of its total business segment operating profit.

Rotary and Mission Systems

Lockheed’s Rotary and Mission Systems business provides design, manufacture, service, and support for areas such as military and commercial helicopters, surface ships, sea- and land-based missile defense systems, radar systems, simulation and training solutions, cybersecurity, and more.

The segment posted $16.15 billion in revenue and $1.67 billion in operating profit in 2022, comprising 24% of the company’s total revenue and 23% of its total operating profit.

Space

Lockheed’s Space business engages in a broad range of activities, including the development and production of satellites, space transportation systems, and defensive systems. The segment is also responsible for various classified systems and services in support of vital national security systems.

The Space segment posted $11.53 billion in revenue and $1.04 billion in operating income in 2022, comprising 17% of the company’s total revenue and 14% of its total operating profit.

Lockheed Martin’s Recent Developments

Lockheed Martin completed the development and production of its first satellite in January 2023. The company stated the mid-sized, flexible satellite was moving toward its launch later in the year. It is fully customizable for many purposes, including military, civil, or commercial uses.

The company announced a number of key orders for its defense and aerospace products, including:

• 40 Sikorsky UH-60M Black Hawk ordered by Australia
• The F-35 Lightning II by the Canadian government

On Feb. 13, 2022, Lockheed Martin announced that it was terminating its previous agreement to acquire Aerojet Rocketdyne Holdings due to a lawsuit by the Federal Trade Commission (FTC) to block the merger.

On Feb. 1, 2022, Lockheed Martin announced the appointment of Jesus “Jay” Malave to the role of chief financial officer (CFO), effective immediately. Prior to his appointment, Malave served as vice president and CFO of Carrier Global Corp., an operating unit of the former United Technologies Corp. He replaces interim CFO John Mollard, who will continue as vice president and treasurer.

How Lockheed Martin Reports Diversity and Inclusiveness

As part of our effort to improve the awareness of the importance of diversity in companies, we offer investors a glimpse into the transparency of Lockheed Martin and its commitment to diversity, inclusiveness, and social responsibility. We examined the data Lockheed Martin releases to show you how it reports the diversity of its board and workforce to help readers make educated purchasing and investing decisions.

Below is a table of potential diversity measurements. It shows whether Lockheed Martin discloses its data about the diversity of its board of directors, C-Suite, general management, and employees overall, as is marked with a ✔. It also shows whether Lockheed Martin breaks down those reports to reveal the diversity of itself by race, gender, ability, veteran status, and LGBTQ+ identity.