10-KPeriod: FY2008

LOCKHEED MARTIN CORP Annual Report, Year Ended Dec 31, 2008

Filed February 26, 2009For Securities:LMT

Summary

Lockheed Martin Corporation's 2008 10-K filing reveals a strong year with net sales reaching $42.7 billion, a 2% increase from the previous year, driven primarily by growth in Electronic Systems and Information Systems & Global Services. The company's reliance on U.S. Government contracts remains high, accounting for 84% of net sales. Despite a challenging economic environment, Lockheed Martin reported a 13% increase in operating profit to $5.1 billion, reflecting effective cost management and program execution. Key growth drivers included the F-35 program and various missile defense systems. Financially, the company ended the year with $2.2 billion in cash and cash equivalents and a significant backlog of $80.9 billion, indicating robust future revenue potential. The company also continued its commitment to shareholder returns through dividends and share repurchases, while managing its debt effectively.

Financial Highlights

49 data points
Beta

Revenue

$41.37B

11.1% Gross Margin

Net Income

$3.22B

7.8% Net Margin

EPS (Diluted)

$7.86

Total Assets

$33.44B

Cash & Equivalents

$2.17B

Free Cash Flow

$3.50B

Financial Statements
Beta
Revenue$41.37B
Cost of Revenue$36.80B
Gross Profit$4.57B
R&D Expenses$698.00M
Operating Income$5.05B
Interest Expense$332.00M
Net Income$3.22B
EPS (Basic)$8.05
EPS (Diluted)$7.86
Shares Outstanding (Basic)399.70M
Shares Outstanding (Diluted)409.40M

Key Highlights

  • 1Net sales increased by 2% to $42.7 billion in 2008, with significant growth contributions from the Electronic Systems and Information Systems & Global Services segments.
  • 2Operating profit rose by 13% to $5.1 billion, demonstrating strong operational performance and cost control.
  • 3The company's backlog stood at $80.9 billion at the end of 2008, providing a strong foundation for future revenue.
  • 4U.S. Government contracts continued to be the primary revenue source, representing 84% of net sales.
  • 5Lockheed Martin ended the year with $2.2 billion in cash and cash equivalents, underscoring a healthy liquidity position.
  • 6The company actively managed its capital structure, reducing long-term debt by $2.4 billion over the past five years, and continued its share repurchase program and dividend payments.
  • 7The F-35 Lightning II program is progressing with multiple variants in development and initial production, positioning it as a significant future revenue driver.

Frequently Asked Questions

In 2008, Lockheed Martin reported net sales of $42.7 billion, a 2% increase from 2007. Operating profit increased by 13% to $5.1 billion, indicating robust operational performance.

The company's sales are heavily dependent on U.S. Government funding (84% of net sales). While the new administration's budget priorities are still emerging, Lockheed Martin believes its diversified programs position it well. However, budget constraints stemming from economic stimulus plans could impact growth rates or lead to program adjustments.

Lockheed Martin ended 2008 with substantial cash reserves ($2.2 billion) and a strong backlog ($80.9 billion). The company is committed to shareholder value through share repurchases and dividend increases, while also strategically managing its debt, having reduced long-term debt significantly over the past five years.

Key growth areas include the F-35 Lightning II Joint Strike Fighter program, which is in development and low-rate production, and the company's significant presence in missile defense systems (e.g., THAAD, PAC-3). The Information Systems & Global Services segment is also expected to see continued strong growth in IT solutions.