UPDATE 1-Lockheed Q3 profit tops estimates; full-year outlook raised
WASHINGTON, Oct 22 (Reuters) - Lockheed Martin Corp, the No. 1 supplier to the Pentagon, reported higher third-quarter profit on Tuesday despite a 4 percent drop in sales, and lifted its forecast for full-year earnings, even as U.S. military spending is reduced.
Lockheed said mandatory budget cuts that took effect in fiscal 2013 would knock about $400 million to $450 million from full-year revenues, just over half of what the company first projected.
Lockheed, which builds F-35 fighter jets, satellites, missile defense systems and coastal warships, said uncertainty about future U.S. budget levels was limiting its ability to make needed investments, .
Chief Executive Marillyn Hewson told reporters she was heartened that Congress agreed to raise the U.S. debt ceiling and fund the U.S. government through next January, but urged lawmakers to find a better solution to U.S. fiscal challenges than across-the-board cuts required under sequestration.
Cutting planned military spending by an additional $50 billion a year over the coming years would make it difficult for the U.S. government to meet its national security needs, and could jeopardize thousands of smaller suppliers across the country that employs tens of thousands of workers, she said.
"We hope they will make the tough choices that provide for the national security needs of this country," Hewson said.
Lockheed said net earnings from continuing operations rose 15 percent to $842 million from $727 million a year earlier despite military spending cuts. Earnings per share rose 16.3 percent to $2.57 and beat the $2.26 expected by analysts in a poll by Thomson Reuters I/B/E/S.
The company forecast consolidated operating profit ranging from $4.625 billion to $4.775 billion for the full year, up from an earlier forecast of $4.55 billion to $4.7 billion. It sees earnings per share of $9.40 to $9.70, up from $9.20 to $9.50.
Chief Financial Officer Bruce Tanner told reporters that Lockheed had maintained strong earnings in the third quarter by such measures as consolidating facilities and laying off workers.
Revenues were projected to reach about $45 billion in the full year, just over the low end of the earlier forecast range of $44.5 billion to $46 billion, he said.
Tanner said the company had a backlog of $79 billion, giving it "a real strong footing" for the future.