Lockheed Martin raises forecast, earnings beat view again

BETHESDA, Md., Wed Oct 24, 2012 – Lockheed Martin Corp., the largest U.S. weapons maker, on Wednesday posted an 11 percent increase in third-quarter earnings, beating expectations by a wide margin, and raised its full-year forecast.

Lockheed warned that revenues would ease slightly in 2013, pulled lower by a mid-single-digit decline in sales at its information systems and global solutions business.

It raised its 2012 earnings forecast to a range of $8.20 to $8.40 from a range of $7.90 to $8.10.

It said business segment operating profit would remain above 11 percent next year.

Lockheed, which receives more than 80 percent of its revenue from the U.S. government, said its preliminary 2013 forecast assumed that Congress and the White House would avert additional defense cuts that are due to take effect next year.

If the cuts go into effect, the company said they would have a material effect on its results.

Net earnings per share rose 11 percent to $2.21 in the third quarter, from $1.99 in the year-earlier period, but they fell from $2.38 in the second quarter.

Analysts surveyed by Thomson Reuters I/B/E/S expected third-quarter earnings per share of $1.85 on revenues of $11.17 billion.

Lockheed, which builds F-35 and F-16 fighter jets, Aegis missiles and new coastal or littoral warships, said revenues dropped 2 percent to $11.87 billion in the third quarter ended Sept. 30, from $12.1 billion in the third quarter of 2011.

Uncertainty clouds outlook for weapon makers: BAE executive

WASHINGTON, Tue Sep 4, 2012 – Uncertainty about $500 billion in additional U.S. defense budget cuts slated to start taking effect in January is “wreaking havoc” on weapons makers, threatening 1 million jobs, jeopardizing the health of suppliers and slowing acquisitions, Linda Hudson, the top U.S. executive at Britain’s BAE Systems Plc, told Reuters.

BAE Systems may have to warn all of its 30,000-plus U.S. employees just before the Nov. 6 presidential election that the budget cuts could lead to about 4,000 layoffs, said Hudson, chief executive officer of the U.S. arm of Britain’s largest defense contractor.

“The environment is wreaking havoc on all of us and our ability to do rational things,” Hudson said in an interview last week, noting that uncertainty about the budget outlook was compounded by the presidential election and U.S. tax rates.

“If everything is cut across the board, we may end up having to send notices to all of our employees that work on government contracts because we can’t pinpoint a location that would be affected, or a program that would be affected,” she said.

Hudson’s comments came about a month after the U.S. Labor Department said the circumstances surrounding the planned cuts were too uncertain to require defense and other federal contractors to comply with a law calling for employees to be notified 60 days before major layoffs or plant closures.