Earnings up at Martin recent deals credited


Martin Marietta Corp., enjoying wider profit margins from the consolidation of several recent acquisitions, yesterday reported a 13.5 percent gain in earnings during the third quarter.

The Bethesda-based company earned $149 million, or $1.39 a share, in the period ended Sept. 30, compared with earnings of $131 million, or $1.21 a share, a year ago. The gain came on revenues of $2.56 billion, just 3.9 percent more than the $2.47 billion a year earlier.

Martin's profits exceeded analysts' consensus estimate of $1.28 share.

"Those strengthened results are indicative of the streamlined company that emerged from combining Martin Marietta and the former GE Aerospace," Chairman and Chief Executive Officer Norman R. Augustine said in a statement.

Martin, the nation's third-largest defense contractor, completed the $3.05 billion purchase of the General Electric Co. division in the spring of last year.

Mr. Augustine said the consolidation of the two companies "is moving forward well ahead of schedule."

For Martin, efficiencies came from consolidating both GE Aerospace and the former General Dynamics Space Systems group, acquired for $208 million in May. The company also signed a letter of intent during the third quarter to pay between $125 million and $135 million in cash for a unit of the Dravo Corp.

In the meantime, Martin is waiting for shareholder and regulatory approvals for its proposed $10 billion merger with Lockheed Corp. of Calabasas, Calif. That deal, announced in August, would make the new Lockheed Martin the largest defense contractor in the country.

"The encouraging aspect is that they are clearly financially and otherwise getting their corporate structure running smoothly, which gives considerable comfort to the idea that they can consolidate with Lockheed," said analyst Wolfgang H. Demisch, of BT Securities in New York.

Lockheed also reported higher earnings yesterday. Third-quarter profits of $112 million, or $1.76 a share, were 3.4 percent higher than a year ago, despite an 8.9 percent decline in revenues, to $3.2 billion in the latest quarter.

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