01—Abstract
Summary
Summary of the 10-K filed January 25, 2022. Cited figures are marked; the original filing is the authoritative source.
Lockheed Martin Corporation (LMT) reported solid performance for the fiscal year ending December 31, 2021, with net sales reaching $67.04 billiona.
The company's financial health remains robust, supported by its significant backlog of $135.36 billionb. A substantial portion of the company's revenue, 71%, is derived from the U.S. Government, with 62% specifically from the Department of Defense, highlighting its critical role in national security. International sales accounted for 28% of revenue, indicating a diversified customer base.
The company's operations are structured across four key segments: Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS), and Space. Aeronautics remains the largest segment, driven by its significant contribution from the F-35 program.
While the company navigates an environment of global security complexities and economic pressures, its strategic focus on program execution, affordability, and technological innovation positions it well for sustained growth. The company also actively manages its capital, including returning value to shareholders through dividends and share repurchases, while addressing its pension obligations.
02—Key points
Key Highlights
- Lockheed Martin generated $67.04 billion in net sales for the fiscal year ended December 31, 2021, a 3% increase from the prior year.
- The company's backlog stood at $135.36 billion as of December 31, 2021, providing strong visibility into future revenue.
- U.S. Government contracts, primarily with the Department of Defense, accounted for 71% of total net sales, underscoring the company's reliance on government spending.
- The Aeronautics segment, driven by the F-35 program, was the largest contributor to net sales, accounting for 40% of the total.
- Net earnings from continuing operations were $6.315 billion, or $22.76 per diluted share.
- The company repurchased shares totaling $4.1 billion in 2021 and paid $2.9 billion in dividends, demonstrating a commitment to returning capital to shareholders.
- An ongoing review by the FTC regarding the proposed acquisition of Aerojet Rocketdyne Holdings, Inc. poses a potential regulatory challenge, with the FTC likely to sue to block the transaction.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Lockheed Martin kept $0.09.
- Revenue$67.04B100.0%
- Cost of revenue−$57.98B86.5%
- Gross profit$9.06B13.5%
- Operating costs$62.0M0.1%
- Operating income$9.12B13.6%
- Interest, other & tax−$2.81B4.2%
- Net income$6.32B9.4%
04—Financials
Financial Highlights
Figures from 10-KFY2021filed January 25, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $67.04B$65.40B | +2.5% |
| Cost of Revenue | $57.98B$56.74B | +2.2% |
| Gross Profit | $9.06B$8.65B | +4.7% |
| R&D Expenses | $1.50B$1.30B | +15.4% |
| Operating Income | $9.12B$8.64B | +5.5% |
| Interest Expense | $569.00M$591.00M | −3.7% |
| Net Income | $6.32B$6.83B | −7.6% |
| EPS (Basic) | $22.85$24.40 | −6.4% |
| EPS (Diluted) | $22.76$24.30 | −6.3% |
| Shares Outstanding (Basic) | 276.40M280.00M | −1.3% |
| Shares Outstanding (Diluted) | 277.40M281.20M | −1.4% |
05—Questions
Frequently Asked Questions
What was Lockheed Martin's financial performance in 2021?
In 2021, Lockheed Martin reported net sales of $67.04 billion, an increase from $65.40 billion in 2020. Net earnings from continuing operations were $6.315 billion, or $22.76 per diluted share. The company maintained a strong backlog of $135.36 billion.
What are the main drivers of Lockheed Martin's revenue?
The primary driver of Lockheed Martin's revenue is its contracts with the U.S. Government, which accounted for 71% of sales in 2021, with 62% coming from the Department of Defense. International sales represent 28% of revenue. The company operates across four segments: Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS), and Space, with Aeronautics being the largest segment.
What are the key risks facing Lockheed Martin according to the filing?
Key risks include a heavy reliance on U.S. Government contracts, potential impacts from changes in government spending priorities, budget cuts, or government shutdowns. Other risks involve program execution challenges (such as on the F-35 program), supply chain disruptions, cybersecurity threats, competition, and regulatory hurdles, including the ongoing FTC review of the Aerojet Rocketdyne acquisition.
How is Lockheed Martin managing its capital and returning value to shareholders?
Lockheed Martin has a balanced cash deployment strategy that includes investing in its business and technologies, returning cash to stockholders through dividends and share repurchases, and managing its debt and pension obligations. In 2021, the company repurchased $4.1 billion of its common stock and paid $2.9 billion in dividends.
06—Continue