WASHINGTON -- The New York Stock Exchange has asked Lockheed Martin Corp. for information on trading in the company's common stock preceding the announcement that it would buy Loral Corp.
In a filing late yesterday with the Securities and Exchange Commission, Lockheed said the stock exchange asked the Bethesda-based aerospace and defense company for the information Friday.
"Lockheed Martin received a written inquiry from the New York Stock Exchange in connection with the NYSE's regularly conducted review of market activity surrounding significant corporate announcements," the company said in a Schedule 14D-1 amendment filing. "The NYSE has requested, and Lockheed Martin intends to provide to the NYSE, certain information relating to the [merger] and the events preceding such public announcement," the company added.
Charles Manor, Lockheed's vice president of news and information, said that the inquiry was part of the exchange's standard reaction to any flurry of market activity before a big announcement. As a self-regulatory body, it is incumbent upon the exchange to look into such activity, he added.
The exchange asked for information regarding who was aware of the merger and at what point they were aware of the merger
prior to the public announcement, Manor said.
The Securities and Exchange Commission and the Chicago Board Options Exchange also are looking into possible trading violations, say regulators familiar with the probes, especially in heavy trading in Loral options before Lockheed announced on Jan. 8 that it would acquire Loral, said regulators familiar with the probes. The day of the announcement, Lockheed stock rose $2.875, to $80.25, but it has subsequently sold off, closing yesterday at $74.125, down 87.5 cents for the session.
Meanwhile, Loral said yesterday that its fiscal third-quarter earnings rose 31 percent, largely on increased sales from the acquisition of Unisys Corp.'s defense business. Loral reported that profit from operations rose to $97.2 million, or 55 cents a share, from $74.3 million, or 43 cents, in the 1994 quarter.
Per-share earnings reflect a 2-for-1 stock split.
The earnings exceeded an average estimate of 51 cents a share, based on a survey of six analysts by Zacks Investment Research. Loral's stock rose 25 cents to $44.75 yesterday on trading of 1.88 million shares.
The aerospace and electronics company's revenue increased 21 percent to $1.61 billion from $1.33 billion. Unisys's defense operations, purchased in March for $862 million, generated $264 million of that.
In the recent quarter, a charge of $5.5 million for Loral's investment in two affiliated companies -- Space Systems/Loral and Globalstar Telecommunication -- made net income of $91.7 million, or 52 cents a share. In the year-ago quarter, a charge of $3.3 million for its investment resulted in net income of $71 million, or 42 cents a share.