Lockheed Martin beats estimate, raises forecast
NEW YORK (Reuters) - Lockheed Martin Corp (LMT.N) reported a greater-than-expected 13 percent increase in quarterly profit and raised its full-year profit forecast as sales of its electronic defense systems and a one-time gain offset lower sales for its F-16 fighter jet program.
The world's biggest defense contractor, in competition with Boeing Co (BA.N) and Northrop Grumman Corp (NOC.N), is the first of the major military firms to report second-quarter earnings, which are broadly expected to be higher as Pentagon spending shows no signs of weakening, despite some concerns that the next administration will cut into some big programs.
The company reported a second-quarter profit of $882 million, or $2.15 per share, compared with $778 million, or $1.82 per share, in the year-earlier quarter.
The profit figure was inflated by a one-time gain of 14 cents per share related to a settlement with the U.S. government over the sale of some land several years ago.
Excluding that gain, Lockheed reported profit of $2.01 per share. That beat Wall Street's average forecast of $1.88 per share, according to Reuters Estimates.
Sales rose 4 percent to $11 billion, helped by higher revenue in its electronic, information and space systems units.
Bethesda, Maryland-based Lockheed, which has been expanding its work in military and civilian electronics, had long expected a dip in sales of its older F-16 jet before its next-generation Joint Strike Fighter comes into full production over the next few years. Its other units have made up for the shortfall.
Factoring in the one-time land sale gain, lower interest expenses and improved performance in its main units, Lockheed raised its full-year earnings forecast to a range of $7.45 to $7.60 per share from its April forecast of $7.15 to $7.35 per share. Analysts are expecting $7.45 per share, on average.
"A reassuring Lockheed quarter," analyst Harry Nourse at Bank Of America said in a note to clients. "A nicely diversified spread of outperformance, and the raise to guidance comes in line with the Street's expectations." Nourse reiterated his "buy" rating on the stock.
Shares of Lockheed were up $1.46, or 1.4 percent, to $103.05 in Tuesday morning trading on the New York Stock Exchange. The stock is down 9 percent from its all-time high in October, hurt by broader concerns about the economy, but has outperformed the Standard & Poor's aerospace/defense index .GSPAERO, which is down about 20 percent in the last nine months.
(Reporting by Bill Rigby; Editing by Mark Porter and Derek Caney)
