CEO & President
Addresses 1Q Results
Addresses 1Q Results
April 23, 2013
To All Lockheed Martin Employees
Thanks to your outstanding performance, our strong first quarter results demonstrate why Lockheed Martin is poised for continued success in spite of a challenging environment.
Even with flat-to-declining customer budgets and the advent of sequestration, thanks to your efforts we improved our net earnings by 14 percent to $761 million and grew cash from operations to $2.1 billion. Our sales were $11.1 billion, a 2 percent decline compared to the first quarter of 2012. We knew going in to this year that financial pressures would challenge our growth. Even with a slight decline in sales, our growing earnings and cash are signs that our business remains healthy.
Of course, there is no shortage of challenges ahead of us. The uncertainty surrounding sequestration still hangs over our entire industry. We’re beginning to see some contract actions on our shorter-cycle programs, as well as the exploration of potentially larger actions as our customers work through the details of how they will implement sequestration’s required cuts.
Although we’re facing uncertainty, I’m confident in our future because of the strength of this team and our portfolio. The recently released 2014 President’s budget affirms that our capabilities are well-aligned with our customers’ priorities. At the same time, you’ve demonstrated the resolve to stay focused on performance, drive innovation, and execute our strategy for long-term success.
On the performance front, we successfully launched the second Space-Based Infrared System (SBIRS) Geosynchronous satellite for the U.S. Air Force, putting eyes in the sky for the military and intelligence community. The U.S. Navy selected us to continue as the lead integrator for Aegis, extending our more than 40-year track record supporting the world’s premier naval combat system. Nellis Air Force Base officially welcomed their first F-35A jets for operational testing, and the F-35B completed its first vertical landing at Marine Corps Air Station Yuma. We also conducted the first guided flight test of a new system called Extended Area Protection and Survivability, which is designed to knock mortar fire and rockets out of the sky – protecting troops on the ground.
When it comes to innovation, we’re moving boldly into new areas that will help our customers rise to the challenges of today and tomorrow. We’re developing an Ocean Thermal Energy Conversion power plant, which will supply 10 megawatts of renewable energy to a green resort being built by the Reignwood Group in China. We also introduced a prototype water filtration system that could create plentiful, clean drinking water at a fraction of the cost required today. And we marked our first full year on the National Science Foundation’s Antarctic Program, where we supported more than 100 cutting-edge scientific projects ranging from climate research to microscopic biology.
Our success is a result of a forward-looking strategy that anticipates change and adapts to stay ahead. We moved early and decisively to improve our affordability, align our portfolio with our customers’ changing needs, and invest in international and adjacent market growth. We’re still looking to tomorrow, and are well-positioned to emerge even stronger from these turbulent times – thanks to your focus and dedication. I’m honored to be a part of your team and look forward to a bright future together.