NEW YORK (TheStreet) -- Lockheed Martin (LMT) , a global security and aerospace company, didn't increase its revenue in the past quarter. But the ongoing escalation in the Middle East could bring its revenue up in the coming quarters. Let's see why.
The company continues to rely heavily on the U.S. government. Last year, the government accounted for 82% of its total sales -- fully 61% were from the U.S. Department of Defense. Conversely, rival security and aerospace company Boeing (BA) relies less on the U.S. government. Its Defense, Space & Security business segment accounted for 35% of revenue in the second quarter.
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In any case, if the U.S government doesn't start to expand its defense budget, this could further slash Lockheed Martin's revenue. The problem is that the Department of Defense's budget is expected to come down by 2.4% in fiscal year 2014 and 1.5% in fiscal year 2015. But the recent turn of events in the Middle East may bring some additional sales for Lockheed Martin after all.
The U.S. government has recently entered into several arms sales, including an $11 billion agreement with Qatar for Patriot missiles and Apache helicopters and a $700 million contract with Iraq for 5,000 Hellfire missiles just to name a few. Moreover, the ongoing fighting between Israel and Hamas could lead to additional shipments of Hellfire missiles to Israel. Those shipments were halted due to an impasse in relations between the White House and the Israeli government. These sales could translate to higher revenue for Lockheed Martin.