Common-Size Income Statement
Lockheed Martin Corp., common-size consolidated income statement
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Sales Composition
- The proportion of net sales derived from products remained relatively stable, fluctuating slightly around 83-84% over the analyzed period. Services contributed between 15.8% and 16.7% of net sales, showing a marginal increase in the middle years before slightly decreasing. Overall, the sales mix indicates a consistently dominant products segment with a stable services contribution.
- Cost Structure
- The cost of sales as a percentage of net sales increased notably, rising from approximately 86.8% in 2020 to over 90% by 2024. The cost attributed to products experienced a notable increase in the final year, reaching -77.21%, indicating a higher cost burden relative to sales in the products segment. Service-related costs remained comparatively stable, fluctuating around -14%. Impairment and severance charges, although minor in magnitude, saw a peak in 2022 before declining thereafter.
- Profitability
- Gross profit margins experienced a declining trend, moving from about 13.2% in 2020 down to under 10% by 2024, reflecting increasing cost pressures. Operating profit margins mirrored this pattern, decreasing from 13.2% to approximately 9.9% over the same period. The diminishing margins suggest tightening profitability possibly due to rising costs or pricing pressures.
- Other Income and Expenses
- Other income and expense items showed mixed movements with marginal net positive impacts in recent years. Interest expense as a percentage of net sales increased steadily from -0.9% to -1.46%, indicating growing financing costs relative to sales. The non-service FAS pension component fluctuated, showing negative impacts in 2021 and 2022 followed by a moderate recovery. Other non-operating income remained minor but positive in several years.
- Income and Earnings
- Earnings from continuing operations before income taxes declined from 12.6% to 8.8% of net sales, exhibiting a downtrend consistent with reduced operating profits. Income tax expense as a percentage of net sales lessened over time, potentially reflecting favorable tax positioning or changing earnings composition. Net earnings from continuing operations similarly declined from 10.5% in 2020 to 7.5% in 2024, demonstrating diminished profitability. Net loss from discontinued operations was minimal and only appeared once, with no subsequent impact recorded.
- Summary
- The overall financial trends indicate stable sales composition but rising costs, leading to compressing gross and operating profit margins. Increasing interest expenses and variable pension impacts contributed to fluctuating non-operating results. Despite slight improvements in tax efficiency, net profitability showed a downward trajectory over the period analyzed, pointing toward emerging challenges in managing cost structures and sustaining earnings growth.