Earnings grew 39 percent for Lockheed Martin Corp. as profits rose across the company's space, IT and aircraft divisions.

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COLLEGE PARK, Md. — Third-quarter earnings grew 39 percent for Lockheed Martin Corp., the nation’s largest defense contractor and maker of the F-16 fighter jet, as profits rose across the company’s space, information technology and aircraft divisions.
Lockheed also raised its full-year 2005 outlook on Tuesday, based largely on a windfall from the sale of 16 million shares of the satellite company Inmarsat that will be recorded in the fourth quarter.

Lockheed reported earnings of $427 million, or 96 cents per share, up from $307 million, or 69 cents per share, in the 2004 third quarter. The company had $9.2 billion in sales compared to $8.4 billion a year earlier.

Analysts surveyed by Thomson Financial predicted third-quarter earnings of 90 cents per share but had a slightly higher sales forecast of $9.36 billion.

Lockheed shares fell 98 cents, or 1.6 percent, to $61.37 in morning trading on the New York Stock Exchange. The stock has traded in a 52-week range between $52.54 and $65.46.

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Best known for its fighter jets, Bethesda-based Lockheed has beefed up its information technology and electronics business units as the Defense Department considers trimming back big and expensive weapons programs. About 40 percent of the company’s work now comes from outside the Pentagon, said Christopher Kubasik, Lockheed’s chief financial officer.

In the third quarter, all three of the company’s major business units posted higher sales.
Lockheed’s information technology and systems group had sales of $4.5 billion, up from $4.2 billion, driven by programs such as missiles and maritime technology. An increase in the company’s government satellite program helped increase space systems sales from $1.4 billion to $1.7 billion.

The company’s aeronautics unit, which makes planes such as the F-35 Joint Strike Fighter and the C-130J transport plane, reported sales of roughly $3 billion, up from $2.8 billion in 2004. Much of that growth came from higher deliveries of C-130Js.

“We really have solid across-the-board performance,” Kubasik said.

On Monday, the Federal Trade Commission asked Lockheed and Boeing Co. to submit more information about a proposed joint rocket launch company. Both companies would have a stake in the United Launch Alliance that would provide rockets to launch satellites primarily for the Air Force. It would also end a bitter legal dispute between the two.

The FTC request marks the second time federal regulators have sought additional information on the deal. Kubasik said Lockheed still hopes to receive antitrust approval and close the deal by the end of the year, despite additional federal scrutiny.

“It is not unusual to get a second request,” he said. “We are just working through the process.”
For the first nine months of 2005, Lockheed reported earnings of $1.2 billion, or $2.81 per share, on sales of $27 billion. In 2004, nine-month earnings were $894 million, or $2 per share, on sales of $25.5 billion.

The company also raised its guidance for 2005, predicting it would earn between $3.85 to $3.95 per share, up from previous estimates of $3.60 to $3.75 per share made in July. Lockheed also narrowed its sales range for the year to between $37 billion and $37.5 billion from a range of $36.5 billion to $38 billion provided in July.

The Inmarsat stock sale, made this month, is expected to account for 12 cents of the higher earnings per share for 2005.

For 2006, Lockheed expects earnings between $4 and $4.25 per share on between $38 billion and $39.5 billion in sales.

Analysts expect 2005 earnings of $3.79 per share with sales of $37 billion. For 2006, they predict $4.22 per share in earnings on $39 billion of sales.