Lockheed Martin’s space profits to decline in 2019 because of ULA
Capitalism in space: Lockheed Martin is projecting a decline in its space profits in 2019 because of a decline in income coming from its ULA partnership with Boeing.
In the previous quarterly earnings call in October, Bruce Tanner, Lockheed Martin’s chief financial officer, warned those earnings could be down as much as $150 million in 2019 compared to 2018. Tanner said then that both the number of [ULA] launches and the mix of vehicles contributed to that decline.
“We have more, for instance, Delta 4 launches in 2018 than we expect to have in 2019,” he said in the prior call. “Those are obviously the most profitable launch vehicles in all of ULA’s portfolio.”
In the latest earnings call, Tanner said the decline would not be as large as previously projected, estimating it to be closer $100 million. Part of the change has to do with improved performance at ULA, he said, but a bigger factor was a delay of a Delta 4 Heavy launch from late 2018 to earlier this month, shifting the profit realized from it to 2019. [emphasis mine]
The highlighted language illustrates why they are losing sales. The Delta family of rockets might bring ULA the most income, but that is because it is also its most expensive rocket to build and launch, and is also the one for which it charges the most.
Back in 2016 ULA announced that it planned to retire Delta, but it has not yet done so, probably because the company earns so much with each launch. Whether they eventually retire it or not doesn’t really matter, however, because its high cost will have it with time go the way of the horse regardless. Other cheaper rockets, such as the Falcon Heavy, are getting the business instead.
In fact, this competitive process probably explains entirely the drop in earnings expected in 2019.
The support of my readers through the years has given me the freedom and ability to analyze objectively the ongoing renaissance in space, as well as the cultural changes -- for good or ill -- that are happening across America. Four years ago, just before the 2020 election I wrote that Joe Biden's mental health was suspect. Only in this year has the propaganda mainstream media decided to recognize that basic fact.
Fourteen years ago I wrote that SLS and Orion were a bad ideas, a waste of money, would be years behind schedule, and better replaced by commercial private enterprise. Even today NASA and Congress refuse to recognize this reality.
In 2020 when the world panicked over COVID I wrote that the panic was unnecessary, that the virus was apparently simply a variation of the flu, that masks were not simply pointless but if worn incorrectly were a health threat, that the lockdowns were a disaster and did nothing to stop the spread of COVID. Only in the past year have some of our so-called experts in the health field have begun to recognize these facts.
Your help allows me to do this kind of intelligent analysis. I take no advertising or sponsors, so my reporting isn't influenced by donations by established space or drug companies. Instead, I rely entirely on donations and subscriptions from my readers, which gives me the freedom to write what I think, unencumbered by outside influences.
Please consider supporting my work here at Behind the Black.
You can support me either by giving a one-time contribution or a regular subscription. There are five ways of doing so:
1. Zelle: This is the only internet method that charges no fees. All you have to do is use the Zelle link at your internet bank and give my name and email address (zimmerman at nasw dot org). What you donate is what I get.
2. Patreon: Go to my website there and pick one of five monthly subscription amounts, or by making a one-time donation.
3. A Paypal Donation:
5. Donate by check, payable to Robert Zimmerman and mailed to
Behind The Black
c/o Robert Zimmerman
P.O.Box 1262
Cortaro, AZ 85652
You can also support me by buying one of my books, as noted in the boxes interspersed throughout the webpage or shown in the menu above. And if you buy the books through the ebookit links, I get a larger cut and I get it sooner.
Capitalism in space: Lockheed Martin is projecting a decline in its space profits in 2019 because of a decline in income coming from its ULA partnership with Boeing.
In the previous quarterly earnings call in October, Bruce Tanner, Lockheed Martin’s chief financial officer, warned those earnings could be down as much as $150 million in 2019 compared to 2018. Tanner said then that both the number of [ULA] launches and the mix of vehicles contributed to that decline.
“We have more, for instance, Delta 4 launches in 2018 than we expect to have in 2019,” he said in the prior call. “Those are obviously the most profitable launch vehicles in all of ULA’s portfolio.”
In the latest earnings call, Tanner said the decline would not be as large as previously projected, estimating it to be closer $100 million. Part of the change has to do with improved performance at ULA, he said, but a bigger factor was a delay of a Delta 4 Heavy launch from late 2018 to earlier this month, shifting the profit realized from it to 2019. [emphasis mine]
The highlighted language illustrates why they are losing sales. The Delta family of rockets might bring ULA the most income, but that is because it is also its most expensive rocket to build and launch, and is also the one for which it charges the most.
Back in 2016 ULA announced that it planned to retire Delta, but it has not yet done so, probably because the company earns so much with each launch. Whether they eventually retire it or not doesn’t really matter, however, because its high cost will have it with time go the way of the horse regardless. Other cheaper rockets, such as the Falcon Heavy, are getting the business instead.
In fact, this competitive process probably explains entirely the drop in earnings expected in 2019.
The support of my readers through the years has given me the freedom and ability to analyze objectively the ongoing renaissance in space, as well as the cultural changes -- for good or ill -- that are happening across America. Four years ago, just before the 2020 election I wrote that Joe Biden's mental health was suspect. Only in this year has the propaganda mainstream media decided to recognize that basic fact.
Fourteen years ago I wrote that SLS and Orion were a bad ideas, a waste of money, would be years behind schedule, and better replaced by commercial private enterprise. Even today NASA and Congress refuse to recognize this reality.
In 2020 when the world panicked over COVID I wrote that the panic was unnecessary, that the virus was apparently simply a variation of the flu, that masks were not simply pointless but if worn incorrectly were a health threat, that the lockdowns were a disaster and did nothing to stop the spread of COVID. Only in the past year have some of our so-called experts in the health field have begun to recognize these facts.
Your help allows me to do this kind of intelligent analysis. I take no advertising or sponsors, so my reporting isn't influenced by donations by established space or drug companies. Instead, I rely entirely on donations and subscriptions from my readers, which gives me the freedom to write what I think, unencumbered by outside influences.
Please consider supporting my work here at Behind the Black.
You can support me either by giving a one-time contribution or a regular subscription. There are five ways of doing so:
1. Zelle: This is the only internet method that charges no fees. All you have to do is use the Zelle link at your internet bank and give my name and email address (zimmerman at nasw dot org). What you donate is what I get.
2. Patreon: Go to my website there and pick one of five monthly subscription amounts, or by making a one-time donation.
3. A Paypal Donation:
5. Donate by check, payable to Robert Zimmerman and mailed to
Behind The Black
c/o Robert Zimmerman
P.O.Box 1262
Cortaro, AZ 85652
You can also support me by buying one of my books, as noted in the boxes interspersed throughout the webpage or shown in the menu above. And if you buy the books through the ebookit links, I get a larger cut and I get it sooner.
No, it has not done so because Delta IV is still flying out its manifest. Delta IV Medium has two flights left: 1) WGS-10 in March (the last WGS satellite in the constellation), and 2) GPS 3-1 in October (which is years behind schedule).
No, Falcon Heavy has not yet stolen any business from Delta IV. Commercially, Falcon Heavy competes with Ariane V and Atlas V, both of which are doing well in their respective markets. On the military side, Delta IV Heavy has launches scheduled out to 2023 — launches that SpaceX didn’t even contest. After that, Delta IV Heavy will be replaced with Vulcan.
There’s only one launch that Falcon Heavy might possibly take from Delta IV Heavy: the WFIRST launch currently penciled in for August of 2024. WFIRST is being designed for a Delta IV Heavy launch, but the launch contract has not been let. I suspect that contract will slip so far out that it will end up being competed by Falcon Heavy and Vulcan, and Delta IV will be retired by then.