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

Sales in Lockheed Martin’s Space segment decreased $352 million, or 11% in the second quarter of 2022, compared to the same period in 2021. Lockheed Martin overall saw a dip in sales in the second quarter — sales declined 9.4% compared to the same time last year. 

Lockheed took a hit in sales after the United Kingdom nationalized the Atomic Weapons Establishment (AWE) on June 30, 2021, taking it from a contract with Jacobs Engineering and Lockheed Martin putting it under control of the U.K. Ministry of Defence. Lockheed said this caused $425 million lower net sales in the quarter, and this is the final quarter that will show a year-over-year difference from the sale. 

The space segment also saw a $55 million dip in sales for commercial civil space programs due to lower volume on the Orion program. These decreases were partially offset by higher net sales of about $130 million for strategic and missile defense programs due to higher development volume with Next Generation Interceptor (NGI).

Space’s operating profit during the quarter decreased $67 million, or 20%, compared to the same period in 2021. Lockheed attributed the decrease to lower net favorable profit adjustment primarily on the Space-Based Infrared System (SBIRS) and classified programs, and about $40 million of lower equity earnings from the company’s investment in United Launch Alliance (ULA). 

Overall, Lockheed Martin reported second quarter 2022 net sales of $15.4 billion, compared to $17 billion in the second quarter of 2021. Sales were down across all four segments. Aeronautics saw the largest decrease. Sales were down 12% due to lower volume on the F-35 production contracts because of supply chain delays. 

Net earnings in the second quarter of 2022 were $309 million, or $1.16 per share, compared to $1.8 billion, or $6.52 per share, in the second quarter of 2021. Net earnings took a hit during the quarter because of a $1.7 billion non-operational charge because of a pension settlement. 

The charge was not included in the company’s prior 2022 financial outlook, and the company updated its outlook for 2022 on Tuesday. Lockheed decreased its net sale projection from $66 billion to $65.25 billion, but held the business segment operating profit steady at $7.175 billion. DIluted earnings per share projection decreased from $26.70 to $21.55. 

“Although revenue in the period was affected by supply chain impacts and the timing of customer contract negotiations, our cost management initiatives resulted in margin expansion,” said Lockheed Martin Chairman, President and CEO James Taiclet. “Moreover, our robust cash generation also continues to provide the resources to invest in building the foundation for future revenue and margin growth opportunities through our classified program capex projects, hypersonics development efforts, and our 21st Century Security and internal Digital Transformation initiatives.”