The four largest U.S.-based space companies, Boeing Co., Lockheed Martin Corp., Northrop Grumman Corp. and Raytheon Co., generally posted strong performances in 2005 thanks to continued strong government work and a resurgence in commercial space activity.
Boeing Integrated Defense Systems (IDS), which includes the company's space operations, reported a 1 percent increase in revenue in 2005 to $30.8 billion, while operating earnings jumped 33 percent to $3.9 billion. Full year operating earnings include a pre-tax gain of $569 million from the sale of the Rocketdyne Propulsion & Power business to United Technologies Corp. in August. Rocketdyne builds engines for the space shuttle and Boeing's Delta family of expendable launch vehicles, as well as missile defense systems.
Launch and Orbital Systems, the space unit within IDS, saw revenues fall 8 percent from $3 billion to $2.7 billion, due primarily to a workers' strike that delayed three launches scheduled for 2005 into 2006. Employees represented by three locals of the International Association of Machinists and Aerospace Workers voted Feb. 1 to accept the company's offer for anew bargaining unit agreements and are scheduled to return to work Feb. 6.
Launch and Orbital Systems posted operating earnings of $780 million despite the lost launch business, rebounding from an operating loss of $342 million. Operating margin rose to 4.2 percent due to higher contract values for Delta 4 launch contracts in 2005 and revised cost and fee estimates in 2004.
Boeing recently announced it will restructure IDS operations into three units. Roger Krone has been named president of Networks and Space Systems unit, which will include Boeing's space and expendable launch businesses, space and intelligence systems and space exploration operations.
Overall, Boeing posted a profit of $2.6 billion in 2005 on revenue of $54.8 billion in 2006, up from a profit of $1.9 billion on revenue of $52.5 billion in 2004.
Boeing expects 2006 revenue to be about $60 billion, with IDS revenues of about $2.5 billion. Launch & Orbital Systems revenue guidance for 2006 includes about $1 billion for business planned to be part of the pending United Launch Alliance. The Boeing- Lockheed Martin joint venture, announced in May, is intended to unite the production, engineering, testing and launch operations associated with U.S. government launches of Boeing Delta 4 and Lockheed Martin Atlas 5 rockets.
Lockheed Martin's Space Systems segment reported revenue growth of 7 percent to $6.8 billion in 2005, as growth in the Satellites unit and the Strategic & Defensive Missile Systems unit offset declines in Launch Services. The increase in Satellites was due to higher volume on government satellite programs that more than offset declines in commercial satellite activities. There were no commercial satellite deliveries in 2005, compared to four in 2004. The decrease in Launch Services sales was mainly due to having three Atlas launches in 2005 compared to six in 2004. Segment operating earnings jumped 25 percent to $609 million in 2005. Satellite operating profit grew due to the higher volume and improved performance on government satellite programs, which more than offset the decreased operating profit due to the decline in commercial satellite deliveries.
Overall, Lockheed Martin reported a profit of $1.8 billion on revenue of $37.2 billion in 2005, up from a profit of $1.3 billion on revenue of $35.5 billion in 2004. In 2005, Lockheed Martin reported a gain from the sale of its investment in Intelsat, a gain related to the investment in Inmarsat, and a loss related to an impairment in the value of a telecommunications satellite operated by a subsidiary.