(Corrects third paragraph to show earnings figure excludes all
one-time items, not just the increase in income tax expense)
* Sees 2013 earnings per share of $8.80 to $9.10
* CEO says focus on further cost-cutting
* Shares down 1.9 percent
By Andrea Shalal-Esa
Jan 24 Lockheed Martin Corp, the
Pentagon's biggest supplier, forecast 2013 earnings growth above
analysts' estimates as it expects a record backlog and continued
efforts to cut costs to overcome an anticipated weakening of
Lockheed said on Thursday that earnings per share had
dropped 19 percent to $1.73 in the fourth quarter from $2.14 a
year earlier, reflecting a large noncash pension adjustment,
higher income tax expenses and a charge for job cuts in its
Excluding those one-time items, Lockheed earned $1.91 per
share, beating the consensus view of analysts polled by Thomson
Reuters I/B/E/S, who had forecast $1.82 per share.
Lockheed said it expected earnings per share to rise to
between $8.80 and $9.10 in 2013 from $8.36 in 2012.
The company is assuming the U.S. Congress will avert $500
billion in additional Pentagon spending reductions known as
"sequestration" that are due to take effect over the next
decade, starting in March.
Chief Financial Officer Bruce Tanner told reporters on a
conference call that it remained unclear how any additional cuts
to the U.S. defense budget would be implemented, which made it
difficult to forecast the coming year's results.
Chief Executive Officer Marillyn Hewson, who took over on
Jan. 1, told reporters the company's results in 2012 were
"extraordinary" but that Lockheed remained focused on cutting
costs and ensuring performance on key contracts.
Lockheed said fourth-quarter sales fell slightly to $12.1
billion from $12.21 billion.
The company said it expected sales of $44.5 billion to $46
billion this year, down from $47.18 billion in 2012, but Hewson
said there were no additional workforce reductions in the works
at this point.
Shares of Lockheed were down 1.9 percent at $94.23 in
Rob Stallard, analyst with RBC Capital Markets, said it was
a good quarter for Lockheed, with its longer-cycle equipment
portfolio offsetting sharper revenue declines in its
shorter-cycle information services division.
He said the company's 2013 outlook for operating profit and
earnings per share had also beaten analysts' expectations.
Hewson told reporters the company's F-35 Joint Strike
Fighter program was progressing "very well," and she expected to
finalize agreements for sixth and seventh production orders with
the Pentagon in the first half of 2013.
Hewson acknowledged that the F-35 fighter used similar
lithium-ion batteries as those being investigated on Boeing Co's
787 Dreamliner, but said the company saw no problem since
the F-35 equipment was made by a different manufacturer and had
been tested and vetted extensively.
She said investigators were still trying to determine what
caused a problem that prompted the Pentagon to ground the U.S.
Marine Corps variant of the F-35 last week and that it was too
soon to predict any effect on the flight test program.
Lockheed said three of its five divisions had reported
higher sales and operating profits for the fourth quarter, but
the space systems and information systems divisions posted lower
profits and sales.
The company said sales and earnings in the information
systems and global solutions business were hit by a continuing
downturn in federal information technology budgets and the
impact of a continuing resolution that took effect Oct. 1 and
which bans new program starts. Sales fell 14 percent in the
quarter, while earnings dropped 20 percent, the company said.
The space systems business also saw sales and earnings fall
in the fourth quarter.
(Reporting by Andrea Shalal-Esa; Editing by Lisa Von Ahn)