Lockheed Martin Corp. surprised no one yesterday by reporting a 20 percent drop in profit from fourth-quarter operations compared with the year before, but it also took the unexpected step of lowering its quarterly dividend by half, to 11 cents.

The dividend cut will save more than $174 million annually, which the company will use to pay down nearly $12 billion in debt accumulated through a decade of acquisitions.

Combined with the corporate reorganization and downsizing announced earlier in the week that are designed to save $200 million a year, the moves appeared to restore some of the credibility the company has lost with Wall Street analysts during a year of financial and operational pratfalls.

In an hour-long conference call yesterday, Wall Street analysts praised Chief Financial Officer Robert Stevens for producing an unusually detailed report explaining the numbers.

"We look forward to being able to say, 'Nice quarter,' but the [report] is good anyway," analyst Joseph F. Campbell of Lehman Brothers Inc. told Stevens, who took office in September.

This qualified praise was an improvement over the tense acrimony that greeted Lockheed Martin's most recent disclosures of financial reverses.

"I think they've certainly got a better handle on their finances than they've had before," said analyst Paul Nisbet of JSA Research Inc.

Lockheed's finances are still anemic, though. The company reported earnings from operations of $227 million, or 59 cents per share, for 1999's fourth quarter, excluding one-time gains. That was down from $285 million (75 cents) for the same period in 1998, on the same basis. Fourth-quarter sales were $6.98 billion, down from $7.18 billion for the year-ago quarter.

Aeronautics remained the weakest link, with high costs and slow deliveries of military aircraft such as the C-130J transport plane and the F-16 fighter jet hurting Lockheed the most. Space revenue fell, but operating profit rose slightly.

There was some good news: Technology services--which includes aircraft overhaul and repair --saw operating profits rise during the period, as did the systems integration line of business.

Several one-time gains from the sale of stocks, assets and real estate boosted fourth-quarter 1999 results. Including those items, earnings totaled $293 million (76 cents), compared with $125 million (33 cents) in the same quarter of 1998, also with nonrecurring items. Adjusted earnings for all of 1999 totaled $381 million (99 cents), compared with $1 billion for 1998 ($2.63), including one-time items.

The company stood by its forecast of $1 in earnings per share for 2000, though it noted that most of its revenue will come in the second half of the year--as much as 50 percent in the final three months.

Stevens pointed out that the year-end backlog of $45.9 billion was up from $45.3 billion at the end of 1998, marking the first such increase in three years. Earnings for 2001 are likely to be around $1.15 a share, Stevens predicted, adding that the figure could grow by up to 20 percent the following year.

All his projections continue to rely on several uncertain events, however. Lockheed Martin is seeking clearance from Congress to complete its acquisition of Comsat Corp. and is counting on the United Arab Emirates to buy 80 F-16 fighters this year.