Lockheed Martin Corp. reported a $54 million first-quarter profit yesterday, beating expectations but still showing signs of slumping sales and flat earnings in its aircraft manufacturing and space systems businesses.
The nation's largest defense contractor reported earnings per share, after a charge, of 12 cents for the first three months of this year, two cents higher than the average analyst's estimate.
While better than anticipated, the results were down more than 70 percent from last year when adjusted for one-time charges. During the first quarter of 1999, Lockheed posted a 23 cents-per-share net loss, a figure attributed mostly to an accounting change. Excluding that adjustment, earnings last year were 51 cents a share for the first quarter.
Company-wide, sales during the first quarter fell 9.7 percent from $6.2 billion to $5.6 billion.
Still, company officials said the report was evidence that the Bethesda-based defense giant is recovering from the profit-sucking operational failures that have driven its performance downward the past two years.
"We are pleased with the progress achieved in the first quarter and believe we have made meaningful strides toward improving value for our customers and shareholders," said Chief Executive Officer Vance Coffman in a statement.
Much of the company's profit drop came from its Denver-based division that builds satellites, rockets and space systems, which had fewer launches and less work on military satellites and classified programs, and posted start-up costs for a new rocket program.
Lockheed Martin's aeronautics division, based in Fort Worth, Texas, also reported a drop in profit. In the first quarter, the division delivered half as many F-16 fighter planes and C-130J transport planes as it did the year before. The company's aeronautics and space divisions have been largely to blame for its recent troubles, as failed rocket launches, lost contracts, delayed deliveries and other problems pushed Lockheed Martin's profit down.
But those troubles have largely withered and the company's shares on the New York Stock Exchange have improved recently, rising more than 45 percent the past two months. Its stock dipped yesterday, falling 31.25 cents to close at $25.5625.
Lockheed Martin officials said yesterday that they expect earnings for the entire year to be about $1.05 per share.
"That's not very good when you consider it wasn't too long ago that everyone thought they'd make $4 a share," said Paul H. Nisbet, an aerospace analyst for JSA Research Inc.
"But they are, I guess, making progress. It will be a long time before they're back where they were, but they're making progress."
Also yesterday, 2,300 machinists at Lockheed Martin's aircraft manufacturing plant in Texas reached a tentative employment contract, ending a two-week strike. Details of the contract were not disclosed.