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Lockheed Martin Reports Sharp Rise in 1996 Profit

Wednesday, January 22 1997; Page D10

Lockheed Martin Corp. reported yesterday that its 1996 profit rose to $1.3 billion, a 98 percent increase from $682 million in 1995, but the results are not as striking as they might first appear. That's because last year's earnings were increased by $142 million in one-time gains, and 1995's profit was depressed by huge one-time expenses related to one of its mergers.

Setting aside the one-of-a-kind events, 1996 earnings rose 8 percent, to $1.2 billion ($5.40 a share), from $1.1 billion ($5.01) in 1995.

Fourth-quarter earnings for 1996 jumped 50 percent, to $465 million ($2.40), from $311 million ($1.56) for the same period in 1995. But those results were skewed for the same reasons as the full-year results.

Sales for 1996 rose 18 percent, to $26.9 billion, from $22.9 billion in 1995. The increase was mostly attributed to Lockheed Martin's acquisition of Loral Corp.'s defense business last spring.

Sales for the quarter ended Dec. 31 jumped 27 percent, to $7.7 billion, from $6.1 billion a year earlier. Those sales increases, too, were larger because of Lockheed Martin's purchase of Loral.

The company's 1996 earnings were inflated by $142 million in one-time events -- the final figure accounting for a much more complicated set of events.

The company had a gain of $365 million, for example, in connection with the distribution of shares in its gravel business. Among other extraordinary events was an accounting charge of $325 million -- an acknowledgment that some of its environmental remediation businesses are running into cost and technical problems, or are years from making money.

Overall, 1996 was an extraordinary one for the company. The Loral acquisition established Lockheed Martin as the world leader in many defense and space technologies. It won a number of huge contracts from the Pentagon and the National Aeronautics and Space Administration.The company has $50 billion in work on hand, up from $41 billion a year ago.

© Copyright 1997 The Washington Post Company

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