Lockheed Martin Sees Profit Rise 10 Percent
Friday, January 25, 2008
Lockheed Martin said yesterday that its fourth-quarter profit rose nearly 10 percent, fueled by strong sales in its satellite, information technology and missile defense businesses, even as its sales of fighter planes declined.
The Bethesda company, the world's largest military contractor, makes fighter jets and missiles, and provides government services. Like other defense contractors, it has benefited from increased defense spending in the past few years.
"Our program execution was solid, we won important new business, and we continued to shape a balanced business portfolio -- all while achieving outstanding financial performance," Robert J. Stevens, Lockheed's president and chief executive, said in a written statement.
For the quarter, Lockheed earned $799 million ($1.89 a share), up from $729 million ($1.68) in the comparable period a year earlier. Revenue was virtually unchanged, at $10.8 billion.
Electronics systems sales, which include air defense programs, rose 2.9 percent, to $2.8 billion. Sales in information systems and global services, which include building complex computer networks for U.S. intelligence agencies and providing desktop services, increased 6.1 percent, to $2.8 billion. And sales of satellites and ballistic missiles rose 6.5 percent, to $2.1 billion.
Sales in its aeronautics business fell 11 percent, to $3 billion. International sales of F-16 fighter jets are slowing as the Pentagon and overseas customers await production of Lockheed's F-35. The company expects a boost in aeronautic sales when it starts to make F-35s for the Air Force.
For 2007, profit was $3 billion ($7.10 per share), compared with $2.5 billion ($5.80) in 2006. Sales were up 5.6 percent, to $41.9 billion.
"The sales profits were quite good for the year," said Phil Finnegan, a defense industry analyst at the Teal Group in Fairfax. "What's important is that they raised their guidance for next year, so the outlook is pretty good.
"People have been concerned about a stagnating defense budget, but the guidance from these companies continues to go up," he said. "There's a lot of uncertainty about the economy, but defense continues to provide stability."
For 2008, Lockheed Martin projects earnings per share of $7.05 to $7.25, below Wall Street's expectations of $7.29.
Shares of Lockheed closed yesterday at $105.90, up $4.21, or 4.1 percent.