Calculation
| Operating profit margin | = | 100 | × | Operating income1 | ÷ | Net sales1 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2019 | 16.36% | = | 100 | × | 4,774) | ÷ | 29,176) |
| Dec 31, 2018 | 16.77% | = | 100 | × | 4,538) | ÷ | 27,058) |
| Dec 31, 2017 | 13.09% | = | 100 | × | 3,318) | ÷ | 25,348) |
| Dec 31, 2016 | 13.46% | = | 100 | × | 3,240) | ÷ | 24,069) |
| Dec 31, 2015 | 12.96% | = | 100 | × | 3,013) | ÷ | 23,247) |
| Dec 31, 2014 | 13.93% | = | 100 | × | 3,179) | ÷ | 22,826) |
| Dec 31, 2013 | 12.39% | = | 100 | × | 2,938) | ÷ | 23,706) |
| Dec 31, 2012 | 12.24% | = | 100 | × | 2,989) | ÷ | 24,414) |
| Dec 31, 2011 | 11.49% | = | 100 | × | 2,857) | ÷ | 24,857) |
| Dec 31, 2010 | 10.35% | = | 100 | × | 2,607) | ÷ | 25,183) |
| Dec 31, 2009 | 12.23% | = | 100 | × | 3,042) | ÷ | 24,881) |
| Dec 31, 2008 | 11.20% | = | 100 | × | 2,596) | ÷ | 23,174) |
| Dec 31, 2007 | 10.93% | = | 100 | × | 2,328) | ÷ | 21,301) |
| Dec 31, 2006 | 9.07% | = | 100 | × | 1,840) | ÷ | 20,291) |
| Dec 31, 2005 | 7.71% | = | 100 | × | 1,687) | ÷ | 21,894) |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$ in millions
The operating profit margin exhibited a sustained upward trajectory over the fifteen-year period from 2005 to 2019, reflecting a significant enhancement in operational efficiency. Starting at 7.71% in 2005, the margin expanded to 16.36% by 2019, more than doubling the initial percentage.
- Initial Margin Expansion (2005–2009)
- A period of consistent growth was observed, with the operating profit margin rising from 7.71% to 12.23%. This increase was supported by a steady rise in operating income, which grew from 1,687 million to 3,042 million US dollars during this timeframe.
- Period of Consolidation and Volatility (2010–2017)
- The margin experienced intermittent fluctuations, including a decline to 10.35% in 2010. Following this dip, the margin generally stabilized and trended upward, oscillating between 10.35% and 13.93%. During this phase, net sales remained relatively range-bound, fluctuating between approximately 22.8 billion and 25.3 billion US dollars.
- Recent Profitability Surge (2018–2019)
- A significant increase in profitability occurred in 2018, with the operating profit margin reaching a peak of 16.77%. This represents the most substantial single-year expansion in the analyzed period. This high level of efficiency was largely maintained into 2019 at 16.36%, coinciding with a peak in net sales of 29,176 million US dollars.
The relationship between operating income and net sales indicates a positive shift in cost management and pricing power. While net sales increased by approximately 33% between 2005 and 2019, operating income grew by approximately 183%, demonstrating that profitability improved at a rate far exceeding revenue growth.
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Comparison to Competitors
| Raytheon Co. | Boeing Co. | Caterpillar Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|
| Dec 31, 2019 | 16.36% | -2.58% | 16.33% | 14.29% | 11.64% |
| Dec 31, 2018 | 16.77% | 11.85% | 16.00% | 13.64% | 12.86% |
| Dec 31, 2017 | 13.09% | 11.01% | 10.32% | 11.60% | 14.49% |
| Dec 31, 2016 | 13.46% | 6.17% | 1.39% | 11.74% | 14.28% |
| Dec 31, 2015 | 12.96% | 7.74% | 7.38% | 11.78% | 13.00% |
| Dec 31, 2014 | 13.93% | 8.23% | 10.22% | 12.26% | 15.01% |
| Dec 31, 2013 | 12.39% | 7.58% | 10.68% | 9.93% | 14.70% |
| Dec 31, 2012 | 12.24% | 7.72% | 13.59% | 9.40% | 13.32% |
| Dec 31, 2011 | 11.49% | 8.50% | 12.46% | 8.56% | 13.92% |
| Dec 31, 2010 | 10.35% | 7.73% | 9.94% | 8.94% | 13.23% |
| Dec 31, 2009 | 12.23% | 3.07% | 1.95% | 9.88% | 12.33% |
| Dec 31, 2008 | 11.20% | 6.49% | 9.26% | 12.01% | 13.14% |
| Dec 31, 2007 | 10.93% | 8.78% | 11.73% | 10.81% | 13.08% |
| Dec 31, 2006 | 9.07% | 4.90% | 12.66% | 9.98% | 12.94% |
| Dec 31, 2005 | 7.71% | 5.13% | 11.13% | 8.02% | 12.26% |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).