Washington – Lockheed Martin Corp., the world’s largest defense contractor, said today that third-quarter earnings soared 47 percent on higher sales in its space and information-technology divisions. The company also raised its outlook for 2006.
Lockheed Martin’s Space Systems unit is based in the company’s Waterton Canyon facility in Jefferson County.
Bethesda, Md.-based Lockheed earned $629 million, or $1.46 per share, in the third quarter, up from $427 million, or 96 cents per share, in the same period of 2005. Quarterly revenue was up 4 percent to $9.6 billion from $9.2 billion.
The recent quarter’s results included $82 million in one-time gains from land sales and tax benefits and an $11 million charge on debt exchange expenses. In total, the one-time events added $71 million, or 16 cents per share, to the third-quarter results.
The earnings surpassed the consensus of analysts surveyed by Thomson Financial, who expected the company to make $1.24 per share excluding the one-time gains. But Wall Street was slightly more bullish on revenue, forecasting $9.83 billion in sales during the quarter.
“It was another solid quarter,” Chris Kubasik, Lockheed’s chief financial officer, said in an interview today with The Associated Press. “Clearly it puts us in good shape for all of ’06.” Lockheed’s IT and systems group, which makes everything from missiles to mail-sorting equipment, saw sales grow 10 percent to $4.97 billion. More satellite deliveries pushed up revenue in the Jefferson County, Colo.-based space division 10 percent to $1.85 billion. In the third quarter, Lockheed won an $8.15 billion contract to build the Orion spacecraft, which will eventually replace the space shuttle.
The company’s aeronautics division, which produces fighter jets and other military planes, experienced a sales dip of 7 percent in the third quarter to $2.77 billion. The company attributed the drop to fewer deliveries of aircraft such as the C-130J transport plane and the F-16 fighter jet.
Lockheed’s newest fighter, the F-35, narrowly avoided cuts this fall in Congress as the program enters early production stages.
President Bush asked for money to fund five new F-35s in the 2007 defense spending bill, but only two were approved by lawmakers.
Kubasik, however, said it was important the program received early funding even though the initial number was reduced.
He also said the company expected the decline in aircraft sales as it transitions from older programs such as the F-16 to the newer F-35, also known as the Joint Strike Fighter or JSF, which is projected to be a $275 billion contract to make about 2,400 planes.
“This is going exactly as planned,” Kubasik said. “As the JSF starts getting into the production, we would expect that trend to reduce.” For the year, Lockheed forecast earnings between $5.45 and $5.60 per share on revenue of $39.0 billion to $39.5 billion. The company said the 30 cent to 35 cent increase is due to better performance in aeronautics and the 16-cents-per-share increase from one-time events during the third quarter. For 2007, Lockheed expects earnings of $5.60 to $5.80 per share on $41 billion to $42 billion of revenue.
Analysts expect 2006 earnings of $5.29 per share on $39.6 billion in revenue. In 2007, Wall Street forecasts $5.66 per share earnings on $41.3 billion in revenue.
Lockheed’s stock closed Monday at $88.19, near its 52-week high.
During that period, Lockheed shares have ranged between $58.88 and $88.95.
In early trading, Lockheed shares gained 24 cents to $88.43.
