01—Abstract
Summary
Summary of the 10-K filed February 26, 2009. Cited figures are marked; the original filing is the authoritative source.
Lockheed Martin Corporation's 2008 10-K filing reveals a strong year with net sales reaching $42.7 billiona, 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 billionb, 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 billionc 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.
02—Key points
Key Highlights
- Net sales increased by 2% to $42.7 billion in 2008, with significant growth contributions from the Electronic Systems and Information Systems & Global Services segments.
- Operating profit rose by 13% to $5.1 billion, demonstrating strong operational performance and cost control.
- The company's backlog stood at $80.9 billion at the end of 2008, providing a strong foundation for future revenue.
- U.S. Government contracts continued to be the primary revenue source, representing 84% of net sales.
- Lockheed Martin ended the year with $2.2 billion in cash and cash equivalents, underscoring a healthy liquidity position.
- The 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.
- The F-35 Lightning II program is progressing with multiple variants in development and initial production, positioning it as a significant future revenue driver.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2008, Lockheed Martin kept $0.08.
- Revenue$41.37B100.0%
- Cost of revenue−$36.80B88.9%
- Gross profit$4.57B11.1%
- Operating costs$475.0M1.1%
- Operating income$5.05B12.2%
- Interest, other & tax−$1.83B4.4%
- Net income$3.22B7.8%
04—Financials
Financial Highlights
Figures from 10-KFY2008filed February 26, 2009Financial Statements
FY2008 against FY2007
| Line item | FY2008FY2007 | Change |
|---|---|---|
| Revenue | $41.37B$41.86B | −1.2% |
| Cost of Revenue | $36.80B$37.63B | −2.2% |
| Gross Profit | $4.57B$4.23B | +8.0% |
| R&D Expenses | $698.00M— | — |
| Operating Income | $5.05B$4.53B | +11.5% |
| Interest Expense | $332.00M$352.00M | −5.7% |
| Net Income | $3.22B$3.03B | +6.1% |
| EPS (Basic) | $8.05$7.29 | +10.4% |
| EPS (Diluted) | $7.86$7.10 | +10.7% |
| Shares Outstanding (Basic) | 399.70M— | — |
| Shares Outstanding (Diluted) | 409.40M— | — |
05—Questions
Frequently Asked Questions
What was Lockheed Martin's revenue and profit performance in 2008?
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.
What is the company's outlook regarding U.S. Government funding, given the economic climate?
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.
How is the company managing its financial health and shareholder returns?
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.
What are the key growth areas or programs for Lockheed Martin?
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.
06—Continue