July 22--Despite absorbing a small dent in its sales, Lockheed Martin Corp. rode the wings of its big aircraft contracts to post a higher second-quarter profit that topped Wall Street's forecast, the company said Tuesday.
The defense giant, based in Bethesda, Md., earned $880 million, up 3.5 percent from the year-ago quarter, on sales of $11.3 billion, down nearly 1 percent over the year, the company said. Earnings per share totaled $2.76, compared with $2.64 in second quarter 2013.
Lockheed beat the analysts' consensus estimate of $2.66 per share on sales of $11.14 billion, according to Thomson Reuters' survey. The company also raised its earnings, sales and cash flow outlook for the rest of the year.
Amid the country's ongoing defense spending drawdown, Lockheed's latest financials were well-received on Wall Street. Its share price rose in early trading Tuesday.
"Lockheed delivered another solid quarter reflecting very good margin performance despite budgetary pressures," said defense analyst Peter Arment of the Sterne Agee brokerage, in a research note. The company "continues to generate significant cash which limits the downside in its shares in the near-term given its aggressive cash deployment strategy" involving share buybacks and dividends.
Lockheed booked its positive quarter despite declining net income in four of its five sectors -- including Missiles & Fire Control and Mission Systems & Training, which have major operations in Orlando. The company employs more than 6,000 in the Orlando area and nearly 1,000 at Cape Canaveral.
Lockheed reported higher quarterly sales related to the Army Apache helicopter's weapons-targeting program, which is managed in Orlando. The company took hits on earnings, however, from reserves set aside to cover potential warranty expenses in the Joint Air-to-Surface Standoff Missile program, also managed in Orlando.
Lockheed primary profit and sales engine for the quarter was its aeronautics business, which is the prime contractor on big military aircraft such as the F-35 Joint Strike Fighter and C-130 Hercules advanced transport plane. Aeronautics' quarterly sales and profit rose 13.2 percent and 11.3 percent, respectively.
"Our sound strategy, diverse portfolio and focus on affordability are yielding results," CEO Marilyn Hewson said in a prepared statement.
email@example.com or 407-420-5256
(c)2014 The Orlando Sentinel (Orlando, Fla.)
Visit The Orlando Sentinel (Orlando, Fla.) at www.OrlandoSentinel.com
Distributed by MCT Information Services