01—Abstract
Summary
Summary of the 10-K filed January 28, 2021. Cited figures are marked; the original filing is the authoritative source.
Lockheed Martin Corporation reported robust financial performance for the fiscal year ended December 31, 2020, with net sales reaching $65.4 billiona.
The company's operations are heavily reliant on U.S. Government contracts, which accounted for 74%b of net sales, with 64% specifically from the Department of Defense. This strong government backing, particularly in defense and aerospace, underpins the company's market position. Lockheed Martin is also actively pursuing strategic growth, notably through the announced acquisition of Aerojet Rocketdyne, expected to close in the latter half of 2021, which aims to enhance its propulsion capabilities.
The company's four business segments—Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS), and Space—all contributed to sales growth, driven by key programs like the F-35 fighter jet, air and missile defense systems, Sikorsky helicopters, and space systems. Despite the challenges posed by the COVID-19 pandemic, which impacted production rates and supply chains, Lockheed Martin demonstrated resilience, partially offsetting these effects through favorable contract timing, operational efficiencies, and reduced overhead expenditures. The company also maintained a strong financial position, with significant backlog and ongoing share repurchase programs and dividend payments, signaling confidence in its future performance and commitment to shareholder returns.
02—Key points
Key Highlights
- Lockheed Martin's net sales reached $65.4 billion for the fiscal year ended December 31, 2020.
- 74% of net sales were derived from U.S. Government contracts, emphasizing the company's strong reliance on defense spending.
- The company announced an agreement to acquire Aerojet Rocketdyne Holdings, Inc. for approximately $4.4 billion, aiming to bolster its propulsion systems capabilities.
- All four business segments (Aeronautics, MFC, RMS, Space) saw sales growth, driven by major programs like the F-35, PAC-3, Sikorsky helicopters, and space systems.
- Despite COVID-19 impacts, Lockheed Martin reported resilient financial performance, supported by favorable contract timing and cost management.
- The company maintained a substantial backlog of $147.1 billion at year-end 2020, indicating strong future revenue potential.
- Lockheed Martin continued to return value to shareholders through dividend increases and share repurchases, reflecting financial strength.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, Lockheed Martin kept $0.10.
- Revenue$65.40B100.0%
- Cost of revenue−$56.74B86.8%
- Gross profit$8.65B13.2%
- Operating costs−$10.0M0.0%
- Operating income$8.64B13.2%
- Interest, other & tax−$1.81B2.8%
- Net income$6.83B10.4%
04—Financials
Financial Highlights
Figures from 10-KFY2020filed January 28, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $65.40B$59.81B | +9.3% |
| Cost of Revenue | $56.74B$51.45B | +10.3% |
| Gross Profit | $8.65B$8.37B | +3.4% |
| R&D Expenses | $1.30B$1.30B | 0.0% |
| Operating Income | $8.64B$8.54B | +1.2% |
| Interest Expense | $591.00M$653.00M | −9.5% |
| Net Income | $6.83B$6.23B | +9.7% |
| EPS (Basic) | $24.40$22.09 | +10.5% |
| EPS (Diluted) | $24.30$21.95 | +10.7% |
| Shares Outstanding (Basic) | 280.00M282.00M | −0.7% |
| Shares Outstanding (Diluted) | 281.20M283.80M | −0.9% |
05—Questions
Frequently Asked Questions
What was Lockheed Martin's total revenue for the fiscal year ending December 31, 2020?
Lockheed Martin reported total net sales of $65.4 billion for the fiscal year ended December 31, 2020.
What is the significance of the U.S. Government to Lockheed Martin's revenue?
The U.S. Government is Lockheed Martin's principal customer, accounting for 74% of its total net sales in 2020 (64% from the Department of Defense). This heavy reliance highlights the importance of government defense budgets and contracts to the company's financial performance.
What are Lockheed Martin's main business segments and what drives their performance?
Lockheed Martin operates in four segments: Aeronautics (military aircraft like the F-35), Missiles and Fire Control (missile defense systems, tactical missiles), Rotary and Mission Systems (helicopters, ships, radar systems), and Space (satellites, missile defense systems). Performance in these segments is driven by major government contracts and programs, including sustainment, development, and production activities.
How did COVID-19 impact Lockheed Martin's operations and financial results in 2020?
The COVID-19 pandemic presented challenges, including increased costs, supplier delays, and impacts from travel restrictions. However, Lockheed Martin mitigated some of these effects through favorable contract award timing, operational adjustments, and reduced overhead. Despite these impacts, the company reported sales growth and resilient financial performance, with the ultimate long-term impact remaining uncertain.
06—Continue