Lockheed Martin beats Wall Street 4Q expectations, JLTV protest still pending

by Wesley Brown ([email protected]) 181 views 

Lockheed Martin turned in a strong fourth quarter performance on Tuesday (Jan. 26) as the nation’s largest defense contractor completed the $9 billion acquisition of helicopter maker Sikorsky Aircraft and separated its government IT and technical services into a $5 billion reverse merger with national security firm Leidos Holdings Inc.

For the period ended Dec. 31, 2015, the Bethesda, Md.-based defense giant reported fourth quarter earnings of $933 million, or $3.01 per share, up 3.2% from to $904 million, or $2.82 per share, in the fourth quarter of 2014. Fourth quarter sales edged up 2.3% to $12.9 billion in the fourth quarter, compared to $12.6 billion a year ago.

Those fourth quarter figures easily beat Wall Street expectations of $2.94 in per-share profit on $12.36 billion in sales, according to analysts surveyed by Thomson Reuters. For the full year, net sales in 2015 rose slight to $46.1 billion versus $45.6 billion in 2014, while profits were flat at $3.6 billion, or $11.46 per share, compared to $3.6 billion, or $11.21 per share in the same period a year ago.

“The corporation completed a year of exceptional operational accomplishments for customers and financial returns to stockholders,” Lockheed Martin Chairman and CEO Marillyn Hewson said in a statement. “The successful closure of the Sikorsky acquisition and completion of the strategic review of our (government IT and technical services) businesses, coupled with our record backlog, position the corporation for future growth and value creation for our customers and our stockholders.”

In the company’s Missiles and File Control division, which includes the company’s operations in East Camden, Lockheed said net sales in the fourth quarter of 2015 increased $106 million to nearly $2 billion, up 6% from $1.86 billion in the same period in 2014. MFC’s Camden Operations facility manufactures Terminal High Altitude Area Defense (THAAD) ground vehicles and missile canisters, the Patriot Advanced Capability-3 (PAC-3) Missile and the Guided Multiple Launch Rocket System (GMLRS).

The increase was attributable to higher net sales of tactical missiles, and fire control deliveries. These increases were partially offset by decreases in net sales of approximately $65 million for air and missile defense programs, which include THAAD and the Patriot missiles. MFC’s operating profit in the fourth quarter of 2015 increased $58 million, or 18%, compared to the same period in 2014. The increase was attributable to higher operating profit of nearly $80 million for air and missile defense programs (primarily PAC-3 and THAAD) due to increased risk retirements.

However, MFC’s net sales in 2015 fell by 5% or $322 million, compared to the same period in 2014. The decrease was attributable to lower net sales of approximately $345 million for air and missile defense programs due to fewer deliveries and lower volume. Full year operating profits also fell by 5% or $62 million from a year. The decrease was attributable to lower operating profit of approximately $100 million for fire control programs due primarily to lower risk retirements of Lantirn and Sniper navigation systems.

JLTV PROTEST STILL PENDING
In mid-December, Lockheed Martin officials moved forward with a federal lawsuit after the U.S. General Accounting Office’s decision to throw out the defense giant’s protest of the highly-sought after $30 billion Joint Light Tactical Vehicle (JLTV) Pentagon contract award that went to rival Oshkosh Defense. Lockheed had planned to produce the military’s next-generation vehicle at the company’s award-winning industrial plant in Camden.

Lockheed officials reiterated Tuesday they remain confident in the merits of the JLTV protest.

“We look forward to having our JLTV complaint heard, and all evidence evaluated, by the (federal) court,” the company said in a statement.