Lockheed Martin Space and Full Company Sales Dip in 2022
Lockheed Martin’s Space segment reported a slight dip in net sales in 2022 compared to 2021, amid a year in which full company sales were slightly down.
Lockheed Martin reported its full year 2022 results on Tuesday, reporting a 1.5% decline in sales in 2022 compared to 2021. Lockheed’s 2022 total net sales were $66 billion, compared to $67 billion in 2021. Space, Missiles and Fire Control, and Rotary and Mission Systems segments reported 2% to 4% sales declines, while Aeronautics grew 1% compared to last year.
Net earnings in 2022 were $5.7 billion, or $21.66 per share, compared to $6.3 billion, or $22.76 per share, in 2021.
For the Space segment, Lockheed Martin attributed the slight decline in sales partially to the re-nationalization of the Atomic Weapons Establishment (AWE) program by the UK Ministry of Defence, which had a $885 million impact. Lockheed also reported a $125 million difference for commercial civil space programs due to lower volume on the Orion program.
At the same time, this was partially offset by higher net sales of about $495 million for strategic and missile defense programs and about $245 million for national security space programs due to higher development volume on classified programs.
Space’s operating profit decreased $89 million in 2022 or 8%, compared to 2021. Lockheed Martin said there were lower net favorable profit adjustments on national security space programs including classified programs and Space-Based Infrared System (SBIRS).
Total equity earnings primarily from United Launch Alliance, a joint venture between Lockheed and Boeing, represented approximately $100 million, or 10%, of Space’s operating profit during the year. This was an improvement over 2021, when ULA equity earnings were $65 million.
Space backlog stood at $29.7 billion at the end of 2022, compared to $25.5 billion at the end of 2021. Lockheed Martin CFO Jesus “Jay” Malave said on Tuesday’s investor call that Space backlog grew 16% based on strong classified program captures and orders for the Orion spacecraft.
Malave said the company booked record orders in 2022 across the company, ending the year with 11% growth in backlog with backlog at $150 billion. Lockheed experienced a “surge in new interest” for security solutions in classified programs in Space and in Missiles and Fire Control, he said.
The company expects sales to be flat or down again in 2023, sharing a financial outlook projecting net sales between $65 billion to $66 billion. The company expects to return to growth in 2024.
“Lockheed Martin’s stronger than expected finish to the year demonstrated the company’s reliability and resiliency to meet commitments in challenging environments, while leading the industry’s critical security advancements for our nation and allies,” said Chairman, President and CEO James Taiclet. “As we track toward our objective of growth resumption in 2024, we will continue to execute our dynamic and disciplined capital allocation program, by reinvesting in our business and pursuing growth opportunities, and returning capital to shareholders.”
Taiclet pointed to Congress signing the fiscal 2023 omnibus spending package in December appropriating $858 billion for national defense, including $817 billion for DoD-based budget, 10% year-over-year growth.
“We view this funding outcome as positive for the future, and our current expectation is that growth will materialize over the longer term, starting in 2024,” Taiclet said on the investor call.