Lockheed profit up amid US budget cuts

WASHINGTON - Reuters

Lockheed Martin Corp, the Pentagon’s largest supplier and maker of F-35 fighter jets (photo) beat analysts’ forecasts with a 10 percent rise in earnings. REUTERS photo

The Pentagon’s top supplier, Lockheed Martin Corp, boosted second-quarter earnings by 10 percent and raised its full-year profit forecast, saying that long-dreaded U.S. budget cuts failed to hurt its sales as much as expected.

“Overall, we had strong operational performance and program execution across all business areas this quarter, enabling us to increase 2013 financial guidance for operating profit, earnings per share and cash from operations,” Chief Executive Marillyn Hewson said in a news release on July 23.

Hewson said the company had let go nearly 30,000 workers since 2008 and consolidated facilities as it braced for up to $500 billion in defense cuts over the next decade.

Chief Financial Officer

Bruce Tanner told reporters that $37 billion in budget cuts imposed on the Pentagon earlier this year were having less impact on the company than initially expected.

Tanner told analysts that Lockheed expected to wrap up talks with the Pentagon about the next two batches of F-35 fighter jets in the third quarter that would add $4.5 billion to $5 billion to the company’s order books. He said the F-35 program accounted for about 15 percent of Lockheed’s revenues and that percentage would grow in coming years. Lockheed is building three models of the F-35 for the U.S. military and eight international partner countries: Britain, Australia, Canada, Norway, Turkey, Italy, Denmark and the Netherlands. Israel and Japan have also ordered the jet.