How Lockheed Martin Makes Money

Lockheed Martin traces its roots back to the early 1900s shortly after the birth of the aviation industry. The company as it's known today is the result of a merger between the Lockheed Corporation and Martin Marietta. Announced in 1994, the merger was completed in March 1995. It brought together the second- and third-largest defense contractors in the country.

The company is a leading force in the global security and aerospace industry. It is engaged in the research, design, development, manufacturing, integration, and sustainment of advanced technology systems, products, and services. The company also provides management, engineering, cybersecurity, and a range of other services through four main business segments:

• Aeronautics
• Missiles and Fire Control
• Rotary and Mission Systems
• Space

Lockheed competes in the United States and internationally. Some of its major competitors include aircraft manufacturer Boeing (BA), defense firm Raytheon Technologies (RTX), defense and aerospace company BAE Systems, and global defense company Northrop Grumman (NOC).

Lockheed Martin’s Financials

Lockheed Martin's fiscal year ends on December 31 each year. For the 2023 fiscal year, the company reported:

• Net earnings of $6.92 billion, which was an increase of 20.73% from the year prior
• Total net sales were $67.57 billion; an increase of 2.41%
• Operating profit, which it uses as a profitability metric for its business segments, increased to $8.51 billion, which was an increase of 1.90%

Lockheed Martin’s Business Segments

Lockheed Martin operates four main business segments: Aeronautics, Missiles and Fire Control, Rotary and Mission Systems, and Space. The company breaks down its revenue and operating income into these four main segments.

The total business segment operating profit in FY 2023 was $7.39 billion; a decrease of 1.04%. The difference between this figure and the company’s consolidated operating profit mentioned above is due to certain items that are not allocated to any of the individual business segments below.

Aeronautics

Lockheed’s Aeronautics business engages in the research, design, development, manufacture, integration, sustainment, support, and upgrade of advanced military aircraft, unmanned air vehicles, and related technologies.

The Aeronautics segment posted $27.47 billion in revenue and $2.83 billion in operating profit in 2023, comprising about 40.66% of the company’s total revenue and 38.23% of its total business segment operating profit, respectively.

Missiles and Fire Control

This business segment offers a diverse range of products and services, including air and missile defense systems, logistics, fire control systems, mission operations support, engineering support and integration services, manned and unmanned ground vehicles, energy management solutions, and more.

The segment posted $11.25 billion in revenue and $1.54 billion in operating income in 2023, comprising 16.65% of the company’s total revenue and 20.86% of its total business segment operating profit, respectively.

Rotary and Mission Systems

Lockheed’s Rotary and Mission Systems business provides design, manufacture, service, and support for areas such as military and commercial helicopters, surface ships, sea- and land-based missile defense systems, radar systems, simulation and training solutions, cybersecurity, and more.

The segment posted $16.24 billion in revenue and $1.87 billion in operating profit in 2023, comprising 24.03% of the company’s total revenue and 25.24% of its total operating profit, respectively.

Space

Lockheed’s Space business engages in a broad range of activities, including the development and production of satellites, space transportation systems, and defensive systems. The segment is also responsible for various classified systems and services in support of vital national security systems.

The Space segment posted $12.61 billion in revenue and $1.16 billion in operating income in 2023, comprising 18.65% of the company’s total revenue and 15.67% of its total operating profit.

Lockheed Martin’s Recent Developments

The company announced a number of key orders in March 2024 for its defense and aerospace products, including:

• A $483 million contract from the U.S. Army for joint-air-to-ground missiles (JAGM) and Hellfire missiles
• A $276 million contract from the U.S. Air Force to train aircrews against adversarial threats

The company delivered its first F-16 Block 70 aircraft to Bahrain and will be delivering the same type of aircraft to Slovakia.

How Lockheed Martin Reports Diversity and Inclusiveness

As part of our effort to improve the awareness of the importance of diversity in companies, we offer investors a glimpse into the transparency of Lockheed Martin and its commitment to diversity, inclusiveness, and social responsibility. We examined the data Lockheed Martin releases to show you how it reports the diversity of its board and workforce to help readers make educated purchasing and investing decisions.

Below is a table of potential diversity measurements. It shows whether Lockheed Martin discloses its data about the diversity of its board of directors, C-Suite, general management, and employees overall, as is marked with a ✔. It also shows whether Lockheed Martin breaks down those reports to reveal the diversity of itself by race, gender, ability, veteran status, and LGBTQ+ identity.

The Bottom Line

Lockheed Martin is one of the most important defense companies in the U.S. and the world, producing a wide range of weaponry. Its Aeronautics segment, which is engaged in the design and production of military aircraft, is its largest revenue generator.