Martin profits up by 17.5%

January 25, 1995|By Ted Shelsby | Ted Shelsby,Sun Staff Writer

Martin Marietta Corp. reported a 17.5 percent increase in fourth-quarter net income yesterday even though sales dropped nTC 12.6 percent -- the result of cost-cutting and greater efficiency.

The Bethesda-based defense contractor, in the final phases of a merger with Lockheed Corp. that will form the world's largest defense contractor, said it earned $139.5 million in the three months that ended Dec. 31, compared with $118.7 million in 1993.

Earnings per share were $1.30, compared with $1.08 in the comparable period of 1993.

Sales totaled $2.8 billion, down from $3.2 billion.

The increase in fourth-quarter earnings despite the drop in sales "reflects a meaningful gain in terms of operating efficiencies and profitability," said Wolfgang H. Demisch, an analyst who follows the defense industry for BT Securities in New York.

Mr. Demisch said earnings were higher than some analysts anticipated, and the gain in operating profits "speaks well of the company's efforts to adjust to a more difficult defense climate where revenues are harder to come by. That's a very fine achievement anyway you slice it."

For the full year, the company said profit before extraordinary charges was up 41.2 percent, to $635.6 million from $450.3 million the previous year. A series of large accounting charges in 1993 reduced net income to $20.9 million.

Per-share earnings were $6 compared with $4.25 in 1993, before the accounting changes.

Martin Marietta's public offering of stock in its Materials division added 56 cents a share to 1994's net income, said Mr. Demisch.

Sales totaled $9.87 billion, a 4.6 percent gain over 1993 sales of $9.44 billion.

Mr. Demisch said he would like to see more stability in Martin Marietta's sales, but he doesn't think it will happen soon. The effects of a two-thirds cut in the Pentagon's procurement budget for military hardware since 1988 "are still flowing through the company's system," and "this will continue throughout the year," he said.

Norman R. Augustine, chairman and chief executive, exulted over the year's performance. "The year just ended may well be remembered as the most remarkable 12 months in Martin Marietta history," he said.

Mr. Augustine said the company achieved benefits from its acquisition of General Electric Co.'s Aerospace division in 1993. The acquisition of the former General Dynamics Corp.'s Space Systems was completed, and related consolidation efficiencies were achieved. The public offering of stock in its Materials division "was over-subscribed, and we announced our planned merger of equals with the Lockheed Corp.," Mr. Augustine said.

Noting other financial accomplishments of the past year, Mr. Augustine said that earnings before interest and taxes exceeded $1 billion for the first time. The company's debt to total capital ratio was reduced to 29 percent from 44 percent at the time of its GE acquisition.

Martin

Marietta Corp. .... ... ... Ticker .... ... ... Yesterday's

Bethesda ... ... ... ... .. Symbol .... ... Cls. ....Chg.

.... ... ... ... ... ... .. ML .... ... ... 44 7/8 unchg

Period ended

12/31/94

... ... ... ... ... ... 4th qtr. .... ... Year ago ... Chg.

Revenue ... ... ... ... $2,785,900 ... ...$3,187,700 .. -12.6%

Net Income ... ... ... .$139,500 ... ... .$118,700 ... .+17.5%

Primary EPS .... ... ...$1.30 ... ... ... $1.08 ... ... +20.4%

... ... ... ... ... Year ... ... ... ..Year ago ... ... Chg.

Revenue ... ... ... $9,873,700 ... ... $9,435,700 ... ..+4.6%

Net Income ... ... .$635,600 ... ... ..$20,900 ... ... .+2,941.1%

Primary EPS ... ... $6.00 ... ... ... .$(0.26) --

Figures in thousands (except per share data.)

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