Lockheed Profit Falls 15% on Weak Electronic, Space-Unit Sales
January 27, 2012, 5:55 PM ESTBy Gopal Ratnam
Jan. 26 (Bloomberg) -- Lockheed Martin Corp., the world’s largest defense company, said fourth-quarter profit fell 15 percent on weak sales in its electronic and space businesses.
Net income from continuing operations fell to $698 million, or $2.14 a share, from $821 million, or $2.28 a share, a year earlier, the company said today in a statement. The average estimate of 23 analysts surveyed by Bloomberg was for a profit of $1.95 a share. Sales declined 4.3 percent to $12.2 billion.
Lockheed forecast 2012 full-year profit per share from continuing operations of $7.70 to $7.90 on sales of $45 billion to $46 billion. Analysts surveyed by Bloomberg estimated profit of $7.63 a share on revenue of $46.6 billion.
Chief Executive Officer Robert Stevens is confronting challenges to the company’s F-35 Joint Strike Fighter -- its single largest program -- as the Pentagon extends the plane’s development phase and plans to delay purchases.
The Defense Department’s 2013 budget will include 13 fewer F-35 jets than previously planned, U.S. officials said yesterday. Purchase of as many as 179 planes may be pushed off beyond 2017, according to the officials who spoke on condition of anonymity before Defense Secretary Leon Panetta outlines the budget plans at the Pentagon today.
Proposed Delays
Proposed delays for the jet come even after Panetta signaled support for the plane last week by lifting a yearlong probation on the Marine Corps’ F-35 model. The $382 billion jet program is the costliest weapon system and the U.S. plans to buy 2,443 jets.
Lockheed of Bethesda, Maryland, fell 51 cents to $81.71 yesterday in New York trading. The shares have gained 3.4 percent in the 12 months before today.
Sales at three of Lockheed’s four units fell during the quarter, led by a 7.8 percent decline in the Electronics Systems unit, which makes anti-missile systems and oversees the Navy’s Littoral Combat Ship program. Sales fell to $3.7 billion because of fewer deliveries of tactical-missile systems, and profit declined 12 percent to $431 million, the company said.
Space Systems sales declined 7.4 percent to $2.11 billion, Lockheed said. Unit profit declined 7.5 percent to $258 million.
Sales at the Information Systems & Global Solutions unit fell 3.5 percent to $2.55 billion. Profit at the unit, which provides information-technology services to U.S. agencies including the Pentagon, rose 28 percent to $254 million.
Revenue at the Aeronautics unit, which makes the F-16, F-22 and F-35 jets as well as C-130J transport planes, increased less than 1 percent to $3.86 billion because of F-35 work, the company said. Unit profit 11 percent to $461 million, driven by higher profits on F-16 jets, the company said.
Sales for 2011 rose 1.8 percent to $46.5 billion from $45.7 billion and per-share profit from continuing operations increased to $7.85, compared with $7.10 a share in 2010.
Lockheed’s discontinued operations including the Pacific Architects & Engineers unit that was sold in April 2011 and the Savi Technologies Inc. unit, which is up for sale.
--Editors: Larry Liebert, Jim Rubin
To contact the reporter on this story: Gopal Ratnam in Washington at gratnam1@bloomberg.net.
To contact the editor responsible for this story: Mark Silva at msilva@bloomberg.net.
