Lockheed Martin's Profit Rises 22% on Jet Fighter Sales
Lockheed Martin, on Tuesday posted a third-quarter profit that beat Wall Street expectations, helped by higher sales of its jet fighters and electronic warfare systems, but it forecast profits for next year slightly below analysts' estimate.
The world's largest defense contractor, which makes F-16 fighter jets and Patriot missiles, and carries out a host of civil government services, is thriving on record Pentagon spending and strong demand for its jet fighters both in the United States and overseas.
It slightly raised its full-year earnings forecast, due to lower anticipated interest expense, but set initial guidance for next year a little below Wall Street's average estimate.
``(The results) were very strong, no question,'' said Paul Nisbet, an analyst at aerospace specialists JSA Research.
''There could conceivably be some disappointment on the initial projections for 2008.''
After initially falling, Lockheed's shares gained in early trading on the New York Stock Exchange.
Lockheed, based in Bethesda, Maryland, reported quarterly profit of $766 million, or $1.80 per share, compared with $629 million, or $1.46 per share, in the year-ago quarter.
That easily beat Wall Street's average estimate of $1.64 per share, according to Reuters Estimates.
Sales rose 16 percent to $11.1 billion, helped by gains in each of its four main operating units, spanning aircraft, electronic systems, information technology and space. That beat analysts' average estimate of $10.39 billion.
Outlook Falls Short of Estimates
For the full year, Lockheed raised its profit forecast by 5 cents to a range of $6.70 to $6.85 per share, because of lower than previously expected interest costs. It kept its sales forecast for this year in the range of $41 billion to $41.75 billion.
That is slightly below Wall Street's average estimate of $6.86 per share profit, and in line with analysts' forecast of $41.7 billion in sales.
In its first forecast for full-year 2008, Lockheed said it expected profit of $6.95 to $7.15 per share, on sales of $41.25 billion to $42.75 billion.
That is slightly below analysts' average forecast of $7.23 per share profit on sales of $42.86 billion.
Over the past few years, Lockheed has generally exceeded its own initial profit forecasts.