I found 12 Big Corps based in the State of Maryland. I am defining these Big Corps as ones that had more than $200 mil in Core Pretax Earnings or Losses in either of the most recent two years: 2010 and 2009.
Anyway, one Giant Corp clearly dominates the Maryland-based Big Corp earnings landscape. US Defense Contractor Lockheed Martin posted Pretax Earnings in 2010 of $3.8 bil, down 10% from 2009. On the very positive side, this profit reduction no doubt put somewhat less pressure on the massive US Deficit.
I think it would be helpful to analyze from SEC filings the past Pretax Profits, Net Sales, and the Profit Margin (i.e. Pretax Profits divided by Net Sales) of Lockheed Martin over the past decade to see where it leads us.
...............Pretax.........Net.......Profit
...............Profits.......Sales.....Margin %
Bush/Cheney Years
2001.....$0.1 bil...$24.0 bil....0.6%
2002.....$0.6 bil...$26.6 bil.....2.2%
2003.....$1.5 bil...$31.8 bil.....4.8%
2004.....$1.7 bil...$35.5 bil.....4.7%
2005.....$2.6 bil...$37.2 bil.....7.0%
2006.....$3.6 bil..$39.1 bil.....9.2%
2007.....$4.4 bil...$40.7 bil...10.7%
2008.....$4.6 bil...$41.4 bil....11.2%
Enter Obama/Biden
2009.....$4.2 bil...$44.0 bil....9.6%
2010.....$3.8 bil...$45.8 bil....8.4%
To put it simply, in 2001, Lockheed Martin was generating just over half of a dollar (55 cents unrounded, which rounds up to 60 cents) of profit for every $100 of sales it made. Most of these sales were to the US government.
And look how that just over half of a dollar of profit continually and monstrously grew during the Bush/Cheney Presidency, which ended in 2008.
Yeah, that just over half of a dollar (really 55 cents, unrounded) earned in 2001 on each $100 of sales grew eight-fold in just two years to be just short of five dollars by 2003, and then nearly doubled in only three more years from 2003 to reach over nine dollars in 2006, and then grew by another two dollars, or by 22%, in two years to reach above eleven dollars in 2008.
Thus, when you go from 55 cents of profit on each $100 of Sales in 2001 to $11 dollars and 18 cents of profit for each $100 of Sales in 2008, the math says you get a twenty-fold increase in Profit Margin Percentage in just seven years. Whew!
And the country is still trying to figure out how we got such a monstrous Deficit? A good chunk of it is due to horrible fiscal controls by the US Government during the 2000s laissez-faire Lost Decade.
So how has the Obama Administration dealt with this 11.2 dollars of profit earned by Lockheed Martin for every $100 of Sales it made in 2008?
Well, it actually has made progress in cutting into this profligate profit. In just two years, it has pared precisely 25% of the 11.2 dollars of profligate Lockheed Martin profit it inherited in 2008, down to 8.4 dollars in 2010.
And it's just not US Defense Contractor Lockheed Martin generating these profligate profit margins on the back of US citizens. It's also the other huge US Defense Contractors.
Here's the Pretax Profit Margin Percentages for the four largest US Defense Contractors for the first and last years of the Bush Administration:
Bush/Cheney Years:
...................................2001.......2008.....Increase
Lockheed Martin.......0.55%......11.18%.....10.63%
Raytheon...................0.69%.....10.88%.....10.19%
Northrop Grumman...5.16%.......7.86%......2.70%
General Dynamics.....11.71%.....12.30%......0.60%
All Four Combined.....3.56%.....10.54%......6.98%
So, it wasn't just Big Oil that flourished during the Bush/Cheney Presidential years....it was also the Big US Defense Contractors.
And then as a comparison, here's the Pretax Profit Margin Percentages for the huge US Defense Contractors, that the Obama Administration inherited in 2008, as well as what they were in 2010:
Obama/Biden Years So Far:
................................2008........2010.....Decrease
Lockheed Martin.....11.18%.......8.35%......2.83%
Raytheon.................10.88%......9.66%......1.22%
Northrop Grumman...7.86%......7.47%.....0.39%
General Dynamics....12.30%.....11.67%.....0.63%
All Four Combined...10.54%......9.61%......0.93%
Perhaps even more telling are the total dollars of Pretax Income and Net Sales for these four huge US Defense Contractors Combined for each of the years from 2001 through 2010:
...........Pretax Income.....Net Sales.....Profit Margin %
.....................(in billions of dollars)
2001...............$2.4.............$66.6...........3.56%
2002...............$4.0............$74.4...........5.32%
2003...............$4.7............$92.7...........5.07%
2004...............$5.6...........$104.8...........5.38%
2005...............$8.1...........$106.7...........7.61%
2006.............$10.2...........$113.0...........9.03%
2007.............$12.3...........$121.3..........10.16%
2008.............$13.3...........$126.2..........10.54%
2009.............$12.9...........$134.6............9.61%
2010.............$12.6...........$138.2............9.15%
Just look at the above numbers! With a severe Recession early in the 2000 Decade and nearly a Depression in the later years of the 2000 Decade, these huge US Defense Contractors' sales and earnings just kept continually powering forward, unabated.....great for their stockholders, executives and employees, but just financially devastating to their main customer, the US Government, and thus also to US citizens.
I think it would be a very wise initiative for the US Government to review the profit margins of every US government contractor, with the goal to wisely and dramatically reduce all profligate profit margins.
Such an initiative is how you make substantial progress in effectively reducing the US Deficit, rather than the way the House Republicans are continually doing, going off course by spending nearly all of their time on attempting to cut many highly-controversial, minor dollar programs. Instead, the House's time should be spent on job creation and energy independence initiatives, which is what the country is shouting out for.
Enough for Lockheed Martin and the massive US Deficit.
The other 11 Maryland Big Corps generated Total Core Pretax Income in 2010 of $4.3 bil, up a massive 97% over 2009.
Maryland is blessed with so many bright, very influential US Senators and US House members....US Senators Barbara Mikulski and Ben Cardin, and also US House members like Steny Hoyer, Chris Van Hollen, Elijah Cummings, and John Sarbanes. No doubt this cadre of very effective advocates for all of the State of Maryland's businesses helped create the economic environment for these firms to flourish in 2010.
Below here are the individual current earnings for these Maryland 12 largest publicly-held Corps, as was disclosed in either their most recent annual Fiscal Year Ended (FYE) 2010 earnings releases or in their most recent SEC annual report filings.
Maryland 12 Largest Publicly-Held Corps Most Recent Annual Pretax Earnings (PTI)
................................................................................Increase
.......................................FYE......PTI(L).....PTI(L)..(Decrease)..
Maryland Big Corp..........2010......2010......2009...Amount..%.
...................................................(millions of dollars)....
Giant US Defense Contractor
Lockheed Martin.............Dec….....3,826....4,230....(404)..(10)%
Other 11 MD Big Corps
T Rowe Price Group.........Dec….....1,070.......689......381....55%
Coventry Health Care(1)..Dec…........965.......505......460....91%
Constellation Energy(2)...Dec…........833.......513......320....62%
Marriott(3)......................Dec…........551........334.....217....65%
McCormick......................Nov….......463.......417........46....11%
Legg Mason(4).................Mar….......365......(379).....744...196%
WR Grace.........................Dec…........240........93.......147...158%
Magellan Health...............Dec…........222.......164........58....35%
FTI Consulting.................Dec…........117.......227.....(110)..(48)%
Host Hotels & Motels.......Dec….......(159).....(236).......77....33%
Ciena(5)...........................Oct….......(332).....(126)...(206).(163)%
Total Other 11 MD Big Corps...........4,335....2,201....2,134....97%
(1) Coventry Health Care 2010 PTI excludes Class Action Charge.
(2) Constellation Energy 2010 PTI excludes both huge Investment Impairment Losses and Gains on Divestitures. Its 2009 PTI excludes both an enormous Gain on Sale of Membership Interest in CENG and Losses on Divestitures.
(3) Marriott 2009 PTI excludes large Time Share Strategy Impairment Charge
(4) Legg Mason earnings numbers for each year are for the 12 months ended December. Its 2009 PTL excludes Asset Impairment Charge, but includes large Fund Support Charge.
(5) Ciena 2009 PTL excludes large Goodwill Impairment Charge. Its 2010 earnings have much higher R&D expense and also much higher Acquisition and Integration Expenses than it did in 2009.
When you look at the above list of these 12 Maryland Big Corps, you have to be impressed with the overall very high quality of nearly all of them.
It is easy to see how firms like Marriott and Host would benefit from the Obama Administration's wise Energy Tax Credit Proposal for Commercial Building Green Retrofit Investments.
The above research, where I found 12 Maryland Big Corps, was performed through the end of March 2011. Since then, in April and May 2011, I extended this research, and I found 3 additional Maryland Big Corps, which are shown here below.
..........................................2010.......2009.........Increase
...........................................Core........Core........(Decrease)
.......State..........................PTI(L)......PTI(L).....Amount.....%
..............................................(millions of dollars)....
Late Big Corp Additions
Maryland (3)
American Capital Agency.....289............119...........170....143%
American Capital, Ltd..........204.............135............69......51%
CapitalSource......................(161)..........(775).........614.....79%
