Profits Up 10 Percent At Lockheed
By Stephen Manning
AP Business Writer"
Lockheed Martin Corp. on Thursday said profits rose 10 percent in the fourth quarter, as gains in its space, information technology and electronic systems units made up for a dip in sales of fighter jets.
The Bethesda defense contractor reported a profit of $799 million, or $1.89 per share, compared to a year-earlier profit of $729 million, or $1.68 per share. Net sales were flat at $10.84 billion.
Analysts polled by Thomson Financial, on average, expected earnings of $1.69 per share on sales of $10.73 billion.
The company raised its forecast for 2008 earnings per share to a range of $7.05 per share to $7.25 per share, from a range of $6.95 to $7.15 previously. Analysts expected earnings of $7.29 per share for the year
Bruce Tanner, Lockheed's chief financial officer, said in an interview that the company boosted its outlook based on operating profit improvements across its business divisions.
"We've got some really good strong momentum going across all four lines of business," he said.
Like other defense contractors, Lockheed has seen its earnings soar in recent years behind big spending increases at the Pentagon on weapons programs. Its fighter jet and other long term projects also make it somewhat immune to any troop withdrawals or shifts in U.S. military strategy in places like Iraq.
Lockheed has warned that it expects sales in its largest division, aeronautics, to drop temporarily while it shifts from building older F-16 jets to new programs like the F-35, a fighter being built for three branches of the military. But the company is still selling F-16s overseas, and the Pentagon indicated it may seek more of Lockheed's F-22 fighter jets to make up for the grounding of much of the Air Force's F-15 fleet due to structural problems.
Lockheed previously expected to see aeronautics sales fall by about $1 billion this year as the programs change over, but Tanner now forecast only about a $850 million drop. He said the company has squeezed cost savings out of programs like the F-16, which has moved to its own assembly line at the company's Fort Worth plant in Texas.
Aeronautics sales dipped 11 percent to $3 billion in the fourth quarter, which Lockheed attributed to lower sales volumes in its F-16, F-35 and C-130J transport plane programs.
Sales in the electronic systems division, which makes missiles and other military equipment, were up 3 percent to $2.9 billion, while the company's information technology unit rose 6 percent to $2.8 billion. Lockheed's space division saw sales grow 7 percent to $2 billion.
For all of 2007, Lockheed earned $3 billion, or $7.10 per share on revenue of $41.9 billion.
Shares rose $1.96 cents to $103.65 at the open of trading Thursday.
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