Lockheed Martin 3Q earnings rise 16%
Lockheed Martin, an aerospace and defense giant, said Tuesday its third quarter net income from continuing operations rose 16% to $842 million on cost cutting and raised its outlook for 2013.
Its pro-forma earnings per share of $2.57, which exclude some non-recurring charges, beat analysts' average estimate of $2.27.
Its shares rose 2.7% on Tuesday morning to $128.73.
Net sales fell 4% to $11.3 billion.
"With strong third quarter performance across our business, we were able to increase net earnings, grow our backlog, generate strong cash from operations and return value to our stockholders," Lockheed Martin CEO Marillyn Hewson said in a statement.
Sales at four of its five business units – aeronautics, information systems, mission systems and Space Systems – fell. Only the missiles and fire control unit reported an uptick in sales as the U.S. government agencies reduce spending on major programs.
Aeronautics' sales for the quarter fell 2% year-over-year as it delivered fewer F-16 jets and faced other cutbacks from the Pentagon. The declines were partially offset by greater sales for the military transport aircraft C-5.
The information systems division reported a 10% sales decline as the government cut back on the U.S. Air Force's command and control programs, an enhanced identification system for the Federal Bureau of Investigation and a new airlines routing system being implemented by the Federal Aviation Administration.
Sales of the mission systems unit fell 9% due to lower sales of weapons systems and other ship and aviation programs to the U.S. Navy.
The space systems' sales declined 5% as NASA rolled back spending for satellites and the Orion Multi-Purpose Crew Vehicle, the agency's spacecraft designed for long-duration space exploration.
Sales of the missiles and fire control unit rose 3% due to a sales increase of about 120 million for air and missile defense programs.
Lockheed generated about $15 billion of orders and increased its backlog to $78.7 billion during the quarter as the Pentagon and other large U.S. agencies continued to spend on large programs. But the company warned that revenue would "decline slightly" next year due to federal budget cuts.
The third-quarter pro-forma earnings account for several special charges, including expenses to cover job cuts at its former electronic-systems division and other pension-related costs.
Lockheed's total net income, including discontinued operations, rose to $873 million from $727 million a year ago.