The article I will be discussing talks about the expected fall in revenue and their sharp fall in operating costs of Lockheed Martin's military space program.
Here is the link to the article:
http://www.spacenews.com/article/financial-report/39543military-space-quarterly-ula-keeps-lockheed-space-profit-up-as-revenue
Lockheed Martin's space system's division is one of the biggest suppliers of military satellites and ballistic missiles. Recently they have had a 5% fall in revenue and were forced to close several plants and lay off 4000 workers partly due to reduced military budgets. Lockheed martin's space system's division however has announced a record 13.1% operating profit. This shows a proportionally fall in total average cost compared to the fall in revenue.
This can be represented by the following graph:
Here is the link to the article:
http://www.spacenews.com/article/financial-report/39543military-space-quarterly-ula-keeps-lockheed-space-profit-up-as-revenue
Lockheed Martin's space system's division is one of the biggest suppliers of military satellites and ballistic missiles. Recently they have had a 5% fall in revenue and were forced to close several plants and lay off 4000 workers partly due to reduced military budgets. Lockheed martin's space system's division however has announced a record 13.1% operating profit. This shows a proportionally fall in total average cost compared to the fall in revenue.
This can be represented by the following graph:
The graph shows that D=AR has fallen to D=AR1 due to a fall in the military's budget and so there is a fall in military satellites and ballistic missiles hence there is a fall in revenue. Though ATC and MC have fallen to ATC1 and MC1 due as a result of closing plants and reducing labor size. The fall in D=AR and MR are proportionally smaller than the fall in ATC and MC which has led to a increase in profit. The proportionally larger fall in ATC and MC is not only due to the reduction of labor but also because of restructuring of the company which has made efficient.