How Much Of Lockheed Martin’s Revenues Comes From The U.S. Government?

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Lockheed Martin (NYSE:LMT) is an American defense contractor and the largest listed pure-play defense company, with the U.S. government being its biggest customer. The U.S. government was responsible for almost 70% of the company’s revenue in 2018. In fact, Lockheed Martin accounts for 28% of the U.S. Department of Defense (DoD’s) total military procurement. Furthermore, a large number of the company’s international customers are allies of the U.S. government who cannot buy from Lockheed Martin without the consent of the U.S. government. We detail the importance of the U.S. government to Lockheed Martin’s Revenue in an interactive dashboard, parts of which are summarized below.

An Overview of Lockheed Martin’s Revenues

Lockheed Martin’s 4 divisions are expected to make $58.1 Billion for the full year of 2019. This includes:

  1. Aeronautics: $22.3 Billion  (38%)
  2. Missiles and Fire Control: $9.2 Billion (16%)
  3. Rotary & Mission Systems: $14.8 Billion  (25%)
  4. Space Systems: $ 11.8 Billion (21%)

In terms of Customer, LMT’s Expected Revenues of $58.1 Bil in 2019 can be divided into 3 categories:

  1. U.S. government – $40.7 Bil (70%)
  2. International Customers – $16.3 Bil (28%)
  3. Others – $1.2 Bil (2%)

Understanding The U.S. Government’s Contribution By Segment:

Lockheed Martin has 4 operating segments and the contribution of sales to the US government on each segment is discussed below:

(1) Aeronautics

  • This segment accounted for 39.4% of the total revenue generated by LMT in 2018.
  • This segment supplies military aircraft to US government and other customers for the following aircraft programs – F-35 Lightning JSF, C-130 Hercules, F-16 Fighting Falcon and F-22 Raptor.
  • In 2018 out of the total revenue from the Aeronautical segment of $21.2 Bil, 63% of the revenue generated was from the U.S. government.

 

(2) Missiles and Fire Control (MFC):

  • This segment accounted for 15.8% of the total revenue generated by LMT in 2018.
  • This segment provides air and missile defense systems; tactical missiles and air-to-ground precision strike weapon systems, including programs like The Patriot Advanced Capability-3 (PAC-3) and Terminal High Altitude Area Defense (THAAD), Multiple Launch Rocket System (MLRS), Hellfire, Joint Air-to-Surface Standoff Missile (JASSM) and Javelin tactical missiles.
  • In 2018 out of the total revenue from the MFC segment of $8.5 Bil, 72% of the revenue generated was from the U.S. government.

 

(3) Rotary and Mission Systems (RMS):

  • This segment accounted for 26.6% of the total revenue generated by LMT in 2018.
  • This segment provides design and manufacturing for a variety of military and commercial helicopters; ship and submarine mission and combat systems; mission systems and sensors for rotary and fixed-wing aircrafts. It includes important programs such as the: Black Hawk and Seahawk helicopters, manufactured for both U.S.and foreign governments, the Aegis Combat System (Aegis), that serves as an air and missile defense system for the U.S. Navy, CH-53K King Stallion helicopter, and the Advanced Hawkeye Radar System etc.
  • In 2018 out of the total revenue from the RMS segment of $14.3 Bil, 71% of the revenue generated was from the U.S. government.

 

(4) Space:

  • This segment accounted for of 18.2% of the total revenue generated by LMT in 2018.
  • This segment is engaged in the development of satellites, space transportation systems, and strategic, advanced strike, and defensive systems. Some of the space programs include – Trident II D5 Fleet Ballistic Missile (FBM) for U.S. Navy, Orion Multi-Purpose Crew Vehicle (Orion) spacecraft for NASA, GPS III for US Air Force.
  • In 2018 out of the total revenue from the Space segment of $9.8 Bil, 84% of the revenue generated was from the U.S. government.

Data around how the U.S. government’s share of Lockheed Martin’s RMS and Space segment revenues have trended over the years is available in our interactive dashboard.

 

The U.S. government has significant dependence on Lockheed Martin for its weapons procurement

 

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