Martin Marietta thinks big on defense work


January 03, 1993|By Ted Shelsby

Bigger is better. That's what Bethesda-based Martin Marietta Corp. is betting.

If approved, as is expected, Martin's proposed $3.05 billion acquisition of General Electric Corp.'s aerospace division will make it the nation's second-largest defense contractor. Annual sales are expected to jump to about $11 billion, up from the $6.08 billion Martin reported at the end of 1991.

Martin's strategy for the new year: Go for a bigger slice of the Pentagon pie. Although defense spending has been under attack, the Defense Department still spends $100 billion a year on such things as rockets, tanks and night vision gear for fighter planes.

Martin earned $269.7 million, equal to $6.30 a share, on sales of $1.5 billion during the first nine months of 1991. It is expected to post earnings of $7.34 a share in 1992, and $7.96 per share this year, according to analysts' estimates compiled by Bloomberg Business News.

Martin is betting that a combined operation will be more efficient, stronger and more competitive.

It could work. Stock analysts call the Martin/GE deal a good fit, noting, for example, that Martin produces Titan rockets used to launch satellites and GE produces satellites for government and commercial customers. For the first time, Martin will be able to offer customers a package deal.

One problem facing Norman R. Augustine, Martin chairman and chief executive: managing the consolidation of GE Aerospace and handling a work force that will grow from 57,000 to 94,000. Martin expects to shrink the work force and boost efficiency in the merged operations.

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