Lockheed cashes in on govt orders

Lockheed Martin Corp, the world's largest defense company, said first-quarter earnings rose 5.8 percent as higher US government computer sales and revenue from development of new NASA spacecraft helped overcome lower F-16 deliveries.

The company said profit will be higher than it forecast in January. Net income increased to $730 million, or $1.75 a share, from $690 million, or $1.60 a share, a year earlier, Bethesda, Maryland-based Lockheed said in a statement yesterday. Sales gained 7.6 percent to $9.98 billion. Results beat analysts' estimates.

Reduced F-16 jet shipments will cut sales by $850 million this year, Lockheed said in January. Lockheed Chief Executive Officer Robert Stevens is finding additional government revenue outside the Pentagon, including development of the craft that will replace the US fleet of space shuttles, and a $1 billion contract from the Federal Bureau of Investigation.

"Lockheed Martin is our favorite defense stock given peer-best quarterly execution, management, returns and an attractive long-term growth profile driven by aeronautics," Richard Safran, a New York-based analyst with Goldman Sachs Group Inc, wrote in an April 8 note. "Lockheed has consistently beat consensus expectations."

The company was projected to report earnings per share rose to $1.63, the average of 18 analysts surveyed by Bloomberg. Sales were anticipated to gain 3.7 percent to $9.62 billion, from $9.28 billion. It was the fifth consecutive quarter Lockheed beat estimates, according to Bloomberg data.

Lockheed rose 33 cents to $106.57 yesterday in New York Stock Exchange composite trading. The shares have gained 10 percent in the past year.

Lockheed now forecasts 2008 earnings per share will rise to $7.15 to $7.35 a share. That's 10 cents a share higher than the range predicted in January and due primarily to higher projected profit at the company's space systems division, the statement said.

The company's sales forecast of $41.8 billion to $42.8 billion hasn't changed.

Lockheed's sales and profit forecasts remain slightly below analysts' estimates. The company was projected to report 2008 earnings of $7.37 a share on sales of $42.9 billion, according to the Bloomberg survey.

Lockheed's results in the quarter included a gain of $10 million, or 2 cents a share, for the recognition of a portion of the deferred gain on the 2006 sale of a commercial rocket- launching venture. Excluding that item, per share profit rose to $1.73.

Agencies

(China Daily 04/23/2008 page17)