Despite hitting or exceeding performance goals for test flights and other
measures, Lockheed Martin's aeronautics division saw fourth-quarter profits
drop by 3 percent or $16 million, the company said Thursday.
The drop was attributed to lower operating profits because of adjustments to the company's F-16 and C-5 programs.
The earnings report comes on the heels of the layoffs of 260 hourly workers at Lockheed's Fort Worth plant. Union officials said the layoffs, which occurred across the board, caught them by surprise. But some have surmised that, at least in part, the workforce reductions stem from the Pentagon's decision to push back schedules on the F-35 program.
Even with the fourth-quarter decline, company officials emphasized a 4 percent rise in profits, to $1.7 billion, for the full year."We did better this year than last year," said Ken Ross, spokesman for the aeronautics division.
The company also said its F-35 test flights were 18 percent ahead of schedule. Aircraft surpassed 5,000 flight hours, officials said.
Overall, the corporation, based in Bethesda, Md., said income from continuing operations was $569 million, or $1.73 a share, in the fourth quarter, compared with $698 million or $2.14 a share a year ago. But the company is forecasting that 2013 profits will be higher than anticipated, in a range of $8.80 to $9.10 a share, well above the $8.28 a share average estimate of 22 analysts surveyed by Bloomberg News.
That projection, however, was largely overshadowed by talk of "sequestration," or the looming automatic spending cuts that could hit defense if Congress fails to resolve its budget woes.
"We remain deeply concerned that sequestration could occur as a default outcome if negotiations fail to produce an agreement," CEO Marillyn Hewson said.
Sequestration would put at risk the nation's defense industrial base and its military readiness, and "hollow out" the nation's military forces, she said.
Other quarterly data showed a 7 percent jump aeronautics division net sales to $4.14 billion, attributed to higher aircraft deliveries in the C-5 and C-130 programs.
Net sales for the year ended Dec. 31 also increased by 4 percent, to $14.95 billion, the report showed.
Lockheed has about 20,000 area employees in the aeronautics division and its missiles and fire control division based in Grand Prairie.
This report includes material from Bloomberg News.
Distributed by MCT Information Services
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