Lockheed Martin was founded in 1995 and provides engineering, design, IT, and defense services to mostly government clients. Lockheed identifies 5 business segments: “Aeronautics, Information Systems and Global Solutions (IS&GS), Missiles and Fire Control (MFC), Mission Systems and Training (MST), and Space Systems.” Lockheed states they organize their business segments based on products and services provided by each segment. Provided below is a summary of 2014 segment revenues and expenses.
To confirm the validity of Lockheed’s identifiable segments a revenue test is applied to segment exceeds the 10% threshold of $456 million. Further, if a profit or loss test is applied to any of the aforementioned segments the threshold of $55.8 million …show more content…
With respect to the Aeronautics segment the majority of revenue is earned through production, design, as well as upgrade and support of Lockheed’s numerous projects. Major programs include the “F-35 Lightning II Joint Strike Fighter, C-130 Hercules, F-16 Fighting Falcon, F-22 Raptor, and the C-5M Super Galaxy.” These programs are all typically very long in duration and provide a sustained revenue stream through maintenance and upgrade years after the sale of a plane. Consider the F-35 JSF program which began in October 2001 and is still underway today with the first F-35s entering service in June of 2015.The Aeronautics segment produces the highest revenue along with the highest net profit of any segment. In contrast, the IS &GS segment provides information systems and management for a myriad of government applications. IS&GS projects are generally smaller and more numerous compared other Lockheed programs. One example being the management of the Global Information Grid (GIG) on behalf of the Department of Defense. The grid is integral to providing quality and timely intelligence, surveillance, and communications to soldiers on the battlefield and beyond. Lockheed signed a 7 year contract with the DOD in 2012 to manage the GIG. In contrast to the F-35 program this represents a much shorter revenue stream and an opportunity for competitors to enter the market upon expiration. IS&GS produces the some of the highest revenues while contributing least to the net profit. As illustrated both the Aeronautics and IS&GS segments service largely different customers to satisfy their diverse
To confirm the validity of Lockheed’s identifiable segments a revenue test is applied to segment exceeds the 10% threshold of $456 million. Further, if a profit or loss test is applied to any of the aforementioned segments the threshold of $55.8 million …show more content…
With respect to the Aeronautics segment the majority of revenue is earned through production, design, as well as upgrade and support of Lockheed’s numerous projects. Major programs include the “F-35 Lightning II Joint Strike Fighter, C-130 Hercules, F-16 Fighting Falcon, F-22 Raptor, and the C-5M Super Galaxy.” These programs are all typically very long in duration and provide a sustained revenue stream through maintenance and upgrade years after the sale of a plane. Consider the F-35 JSF program which began in October 2001 and is still underway today with the first F-35s entering service in June of 2015.The Aeronautics segment produces the highest revenue along with the highest net profit of any segment. In contrast, the IS &GS segment provides information systems and management for a myriad of government applications. IS&GS projects are generally smaller and more numerous compared other Lockheed programs. One example being the management of the Global Information Grid (GIG) on behalf of the Department of Defense. The grid is integral to providing quality and timely intelligence, surveillance, and communications to soldiers on the battlefield and beyond. Lockheed signed a 7 year contract with the DOD in 2012 to manage the GIG. In contrast to the F-35 program this represents a much shorter revenue stream and an opportunity for competitors to enter the market upon expiration. IS&GS produces the some of the highest revenues while contributing least to the net profit. As illustrated both the Aeronautics and IS&GS segments service largely different customers to satisfy their diverse