Lockheed Martin reported a net sales increase of over US$800m in Q2 this year compared with the same reporting period in 2020 due in part to strong figures from the Space business segment, while overall operating profit dipped by US$43m.
Revealing the corporate performance over Q1 and H1 of the year on July 26, Lockheed Martin stated that in the first six months of 2021 net sales were up US$1.41bn to US$33.28bn compared with the same period in 2020.
However, Q2 net earnings included a loss of US$225m recorded at the Aeronautics business segment related to performance issues experienced on an unspecified classified programme. Cash from operations in Q2 of 2021 was $1.3 billion, compared to $2.2 billion in Q2 of 2020.
Regarding the classified programme, James Taiclet, president and CEO of Lockheed Martin, speaking during a webcast detailing the company’s Q2 results, said that its unnamed customer was “highly attracted to the capability being developed in their behalf” and the “significant” long-term potential it presented.
Breaking down the business segment figures, Aeronautics' net sales during Q2 of 2021 increased US$163m, or 3%, compared to the same period in 2020, primarily due to a gain of about US$100m for the F-16 programme due to increased production volume, partially offset due to decreased sustainment volume.
The F-35 programme also benefited by US$90m attributable to increased production and sustainment volume, slightly offset due to decreased development activities. Aeronautics’ increases were partially offset by lower net sales of approximately US$60m for the F-22 programme due to decreased sustainment volume.
The Aeronautics segment’s operating profit during Q2 2021 decreased US$167m, or 23%, compared to the same period in 2020, due in part to the aforementioned classified programme, with a further US$20m as a result of lower sustainment volume in the F-22 programme.
Elsewhere, the Missile and Fire Control (MFC) business segment saw net sales increased US$143m, or 5%, in the reporting period, due in part to higher net sales of approximately US$110m for tactical and strike missile programmes from higher production volume of the US Army Tactical Missile System and the Long-Range Anti-Ship Missile.
Operating profile for MFC increased by US$31m, or 8%, in Q2 this year compared to the same period in 2020.
The Rotary and Missions Systems segment also saw its net sales increase in Q2 2021 compared to 2020, with a rise of US$203m, or 5%, to US$4.24bn, attributable to higher net sales of approximately US$230m for Sikorsky helicopter production volume on the Black Hawk, Combat Rescue Helicopter (CRH) and CH-53K programmes. The rotary component was partially offset by lower production volume on Seahawk programmes.
Operating profit increased approximately US$20 million for Sikorsky helicopter programmes due to higher production volume on the Black Hawk, CRH, and CH-53K programmes.
It was in the Space business segment however that the largest increases in net sales and operating profit was seen, recording US$300m (+10%) and US$83m (+33%) figures respectively. A significant portion of net sales (US$125m) was attributable to the UK’s Atomic Weapons Establishment (AWE) programme due to higher volume, while about US$100m in net sales gains for national security space programmes were recorded.
Lockheed Martin had previously detailed that effective June 30, 201, the AWE would not be included in the company’s Q3 report followed the UK’s decision to renationalise the company.
Further information detailed during the Q2 results webcast included a reiteration of the intention to deliver between 135-139 F-35 stealth fighters through the year, while the F-16 programme had 128 aircraft on backlog, many to international customers.
By Richard Thomas