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Comparing Lockheed Martin with other major defense contractors
With total sales of $45,358 million in 2013, Lockheed Martin is the largest defense contractor in the world. The other major defense contractors in the world include The Boeing Company and Raytheon Company.
The U.S. government is Lockheed Martin’s (LMT) major customer. With almost 82% of its revenues from the U.S. government, LMT highly depends on the government.
Lockheed Martin started deliveries on its major F-35 program just three years ago. Lockheed Martin works with almost 1400 suppliers, including companies like Northrop Grumman.
In terms of revenue, Lockheed Martin (LMT) is one of the largest defense contractors. Wars with Afghanistan and Iraq led to an increase in defense budgets, which has benefited LMT.
What’s more important to retail investors is Lockheed Martin’s commitment to return at least 50% of its free cash flow to its shareholders. It does this through dividend payouts and share buybacks.
What matters to retail shareholders is not the company’s ability to make profits—but its ability to generate strong cash flows from these profits.
As we’ve seen in the last few articles of this series, Lockheed Martin’s (LMT) management has been trying different strategies to drive growth in its revenue and earnings. These efforts seem to have paid off.
Lockheed Martin on an acquisition spree As we saw in the previous article in this series, Lockheed Martin’s revenue has been negatively affected by U.S government spending cuts through sequestration and the Budget Control…
The impact of sequestration is different for Lockheed Martin’s (LMT) different business segments. For segments with longer product cycles, like Aeronautics and Space Systems, the impact will be muted.
Lockheed Martin’s outlook for 2014 Lockheed Martin (LMT) reported a ~1% decline in both its net sales and segment operating profit in the two quarters of fiscal 2014. However, at…
Lockheed Martin (LMT) operates in five business segments—Aeronautics, Information Systems & Global Solutions, Mission and Fire Controls, Mission Systems & Trainings, and Space Systems.
In 2013, Lockheed Martin clocked revenues of $45.4 billion. Of its revenues, 82% come from the U.S. government, around 17% from international customers, and 1% from other U.S. commercial customers.
Major U.S. airlines released their third quarter earnings on October 23, 2014. All major airlines reported positive growth in traffic and revenue.
The second largest cost component for airlines—after fuel cost—is salaries, wages, and benefits. Employment in the U.S. airline industry increased in the last couple of years.
The Brent crude oil price is expected to fall by ~4% in 2014—to $104.42 per barrel. Jet fuel price is a refined product of crude oil. It fell below $112 per barrel in September.
Fuel cost is the largest cost component for airline companies. Jet fuel is produced by refining crude oil. As a result, jet fuel prices follow the trend in crude oil prices.
To calculate the CPI, price changes are averaged based on their respective weights in the index. The Airfare Index and the Fuel Index are included in the CPI.
Airfares are sensitive to changes in demand and supply. Sometimes airlines are forced to increase prices because of rising fuel costs. They add or increase the fuel surcharge.
Yield is the average fare per passenger per mile. Passenger revenue is calculated by multiplying revenue passenger miles (or RPM) by the yield.
Load factor measures capacity utilization. It indicates the percentage of total capacity that an airline utilizes. Airlines are capital intensive. They have high fixed costs.