Increased Space Sales Contribute to Strong Quarter for Lockheed Martin

Lockheed Martin headquarters in Bethesda, Md. Photo: Lockheed Martin

Lockheed Martin’s Space segment saw a 12% increase in sales in the second quarter of 2023 compared to the same time last year, with higher sales on both national security and civil space programs. 

Lockheed Martin released its second quarter financial results on July 18, with an overall 8% increase in sales driven by Space and Aeronautics. The Aeronautics segment grew sales 17% in the quarter with higher sales on the F-35 program. The Missiles and Fire Control and Rotary and Mission Systems were flat and down 3%, respectively. 

The Space segment posted $3.2 billion in sales in the second quarter, up $341 million compared to the same period in 2022. The segment had $150 million in increased sales for strategic and missile defense programs. 

Lockheed also reported a $120 million increase in sales for national security space programs including the Space Development Agency’s Transport layer. The company has a contract valued around $700 million to provide 42 satellites for Tranche 1 of the Transport layer. 

The segment also saw higher net sales of $65 million for commercial civil space programs, including the Orion crew capsule. 

Space operating profit increased 15% compared to last year, and margins were up 30 basis points driven by increased volume and higher equity earnings from United Launch Alliance (ULA). ULA equity earnings represented approximately $20 million, or 6%, of Space’s operating profit in the second quarter of 2023, compared to approximately $5 million, or 2%, in the second quarter of 2022.

On a Tuesday call with investors, Lockheed Chairman, President, and CEO James Taiclet said the space segment had earlier-than-expected ramp-ups on certain programs that led to higher sales in Q2. 

“The first half we ran higher than we expected, and we were expecting to run at those levels in the back half of the year,” Taiclet said. “This includes classified programs, also protected communications, international security space business, as well as our strategic missile defense business within space. We’ve also had a little bit of growth in the Next-Gen OPIR program. All of those together drove the increase …. we had already planned on ramping up those programs in the back half [of the year].”

Overall, the company has a record backlog of $158 billion — up $8 billion from year-end. 

The results led Lockheed Martin to raise its guidance for 2023, increasing its projections for sales between $65 billion to $66 billion, to $66.25 billion to $66.75 billion. 

“Given the strength of our year-to-date results and ongoing demand for our signature programs and advanced technologies, we are raising our full year sales and earnings per share outlooks for 2023. We are confident in our return to growth and ability to reward our shareholders over the long run with reliable free cash flow per share expansion and cash deployment,” Taiclet commented.