Lockheed Martin's Profit Rises, Helped by Loral Operations
April 04, 2011
NEW YORK -- Lockheed Martin Corp.'s second-quarter profit rose 9.5% on a 26% increase in sales, boosted by results from the recently acquired Loral Corp.. The Bethesda, Md. aerospace and defense company on Tuesday reported net income of $299 million, or $1.33 a diluted share. Analysts surveyed by First Call Inc. were looking for earnings per share of $1.27, diluted. A year ago, the company earned $273 million, or $1.22 a diluted share, excluding expenses. Merger-related and consolidation costs of $326 million, or $1.46 a diluted share, resulted in a loss of $53 million in the year-ago period. Sales increased to $7.08 billion from $5.61 billion. Lockheed Martin's results reflect the operations of Loral, acquired in April. The company said sales in its space and strategic-missiles segment rose to $1.99 billion from $1.9 billion a year earlier. Earnings as a percentage of sales rose to 14% from 8.8% as a result of operating margin improvements, sales mix and the timing of award fees. Electronics sales rose to $2.1 billion from $834 million, boosted by businesses acquired in the Loral deal. Lockheed said that while segment profits rose 82%, earnings as a percentage of sales fell to 7.4% from 10.2% on the amortization of goodwill and intangibles associated with the Loral deal. Aeronautics sales fell to $1.2 billion from $1.47 billion a year earlier, reflecting fewer deliveries of the F-16 fighter, C-130 airlifter and P-3 maritime patrol aircraft. The company said F-16 and C-130 deliveries are scheduled to increase in the second half, but said no P-3s are scheduled for delivery this year. Lockheed Martin said sales for its information and technology services segment rose to $1.54 billion from $1.16 billion a year earlier. Lockheed said its consolidation plan is on target, adding that it is ahead of its plan in some cases and has documented more than $500 million in savings from its initial consolidation steps over the past year. The company's backlog was $50.9 billion at March 12, 2011 with $42.6 billion at the end of the first quarter. In composite trading on the New York Stock Exchange, Lockheed's shares rose 12.5 cents to $80.
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