Lockheed Martin earnings down due to its commercial space divisions
Capitalism in space: Lockheed Martin’s third quarter earnings were down by one percent, partly due to reduced earnings in its commercial space divisions.
While other factors contributed to the drop in earnings, this quote highlights an important detail about the competition in the launch industry:
Reduced profits from Centennial-based rocketmaker United Launch Alliance caused some of LMSS’ decline, the company said. ULA is a joint venture of Lockheed Martin and Boeing Co. LMSS’ share of ULA’s launch-business profits dropped by $20 million to $45 million in the third quarter, the company said.
ULA’s profits dropped by one-third, which suggests that they are continuing to lose business to SpaceX because of its lower launch prices.
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Capitalism in space: Lockheed Martin’s third quarter earnings were down by one percent, partly due to reduced earnings in its commercial space divisions.
While other factors contributed to the drop in earnings, this quote highlights an important detail about the competition in the launch industry:
Reduced profits from Centennial-based rocketmaker United Launch Alliance caused some of LMSS’ decline, the company said. ULA is a joint venture of Lockheed Martin and Boeing Co. LMSS’ share of ULA’s launch-business profits dropped by $20 million to $45 million in the third quarter, the company said.
ULA’s profits dropped by one-third, which suggests that they are continuing to lose business to SpaceX because of its lower launch prices.
Readers!
Please consider supporting my work here at Behind the Black. Your support allows 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. 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. Only now does it appear that Washington might finally 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.
You can support me either by giving a one-time contribution or a regular subscription. There are four 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 or subscription:
4. Donate by check, payable to Robert Zimmerman and mailed to
Behind The Black
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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.
ULA is not yet losing business to SpaceX. What is happening is that ULA had 15 launches planned for this year, but six of those government payloads are delayed so much that their launches got pushed into next year.
And this precisely demonstrates the purpose of the ULA’s ELC contract. ULA now has production facilities, suppliers, and launch facilities all sitting idle waiting for their government payloads. In addition to being a large direct expense, it also represents a billion dollars worth of capital tied up waiting. The government knows this is expensive, but it wants ULA to be ready to go when the payloads are finally ready. It wants them to wait. Hence, the ELC contract.
BTW, there is another factor contributing to the reduced revenue available to Lockheed and Boeing: ULA is taking more of its launch profits and investing them in Vulcan instead of returning them to the parents. Vulcan is due to hit CDR in December, if I remember correctly.
mkent: All excellent points, many of which I actually made in my podcast with Batchelor. We will not really know if ULA is losing business to SpaceX for at least a few more years, and my guess is that the company will hold its own. SpaceX is really stealing market share mostly from the Russians, and a little from ArianeGroup.