Lockheed CFO sees no divestitures in 2011

ATLANTA (Reuters) - Lockheed Martin Corp (LMT.N), which has cut staff and taken other steps to streamline as U.S. defense spending comes under pressure, is not looking to make divestitures this year, the defense contractor's chief financial officer said on Thursday.

"While we do take a look at our portfolio constantly, I don't expect any divestitures coming in 2011," CFO Bruce Tanner told Reuters in an interview. He added that Lockheed felt its current lineup of products and services was relevant to customer needs.

The world's largest defense contractor sold its Enterprise Integration Group advisory business to a private equity firm last year, and has said it expects to announce a deal to sell Pacific Architects and Engineers Inc (PAE), a military services unit, in the current quarter.

"We don't feel a need to divest, nor do we feel the need ... to go out and make large acquisitions to try to get sales growth," Tanner said.

Lockheed has taken many steps to cut costs as its main customer, the U.S. Department of Defense, seeks to make arms programs more affordable. For example, more than 600 Lockheed executives opted to take voluntary buyouts in an initiative the company launched last year to pare overhead.

Tanner said Lockheed was upbeat about prospects for the U.S. Marine Corps version of its F-35 Joint Strike Fighter plane. That variant, which offers short takeoff and vertical landing (STOVL) capabilities, was put on a two-year "probation" by U.S. Defense Secretary Robert Gates earlier this year, and could be canceled if Lockheed is unable to fix test problems.

Last year, Lockheed acknowledged a lag in flight testing of the Marine version of the F-35, citing problems with small components.

Tanner said the Marine version was "the most challenging" of the F-35's three variants, but he cited recent improvements with flight testing.

"So far in the month of January we are actually flying that aircraft ahead of its planned flights" for the month, he said.

"I think we're seeing some improvement and we remain confident that we are going to get this program in a state that will enable the customer to fill out its inventory needs," he added.

Lockheed posted a better-than-expected fourth-quarter profit on Thursday and forecast 2011 earnings above analysts' average estimate.

(Reporting by Karen Jacobs; editing by John Wallace)