Lockheed Martin beat Wall Street’s third-quarter predictions Wednesday reporting a 23 percent jump in earnings for the third quarter of 2007 and an increase of 16 percent in sales.
The Bethesda company posted earnings of $766 million, or $1.80 per share, up from $629 million, or $1.46 per share, during the third quarter of 2006. Third-quarter sales rose to $11.1 billion from $9.6 billion.
All of Lockheed’s four business segments saw increases in sales for the third quarter.
Aeronautics, which includes fighter jets and the C-130J transport plane programs, posted a 16 percent increase in sales to $3.34 billion. Electronic systems, which makes missiles and other warfare equipment, was up 10 percent to $2.83 billion. Information systems and global services revenue rose 24 percent to $2.7 billion, while Lockheed’s space business was up 19 percent to $2.2 billion.
Lockheed, the nation’s largest defense contractor, attributes the continued growth to the ongoing war effort and national security concerns.
“The defense and security environment will require significant expenditures in the near term,” which will generate increasing budgets through 2009, said spokesman Jeff Adams.
The defense industry won’t slow down for quite some time, agreed Vago Muradian, editor of Springfield publication Defense News. “Even people in the industry are surprised it’s been going as well as it has.”
Lockheed delivered the 100th F-22 Raptor fighter jet in the third quarter and won a $4.1 billion U.S. Air Force award for an additional 60 aircraft, extending production to 2011, Adams said. Another $1.1 billion, 10-year Air Force contract was awarded in the third quarter for aircrew training and rehearsal support.
The financial outlook for 2007 projects sales of between $41 billion and $41.8 billion with earnings of $4.5 billion to $4.6 billion. Increases are predicted across the board for 2008, with sales between $41.3 billion to $42.8 billion and earnings between $4.7 billion and $4.8 billion.
“The strong bipartisan support to replace aging [systems] should provide ongoing growth and extensions for many of our programs,” said Adams, highlighting the C130J Hercules cargo plane and F-35 Lightning joint strike fighter aircraft programs.
“It’s a question of time horizons,” Muradian said, noting that, if defense spending starts trailing in 2009, by the time the money is given out in contracts, the effects won’t be felt until 2012.
The Associated Press contributed to this story.
