Lockheed Martin has loss of $53.2 million

July 26, 1995|By Ted Shelsby | Ted Shelsby,Sun Staff Writer

Lockheed Martin Corp. posted a second-quarter net loss of $53.2 million yesterday, but operating profits rose a hefty 19 percent.

The loss stems from the company's previously announced $525 million charge against earnings in the period to cover expenses related to the merger of Martin Marietta Corp. and Lockheed Corp. in March.

Net income, excluding the merger-related charge and last year's payment of $50 million from Grumman Corp. for backing out of its plan to merge with Martin Marietta, was $273 million, up from $229 million in the second quarter of 1994.

Sales rose slightly less than 1 percent to $5.6 billion.

"There were no surprises," said Paul H. Nisbit, president of JSA Research in Newport, R.I. "Earnings seem to be in line with what we expected."

Last month Lockheed Martin announced that the merger would result in the elimination of more than 12,000 jobs and the closing of 38 plants and other facilities around the world, including a 245-worker research laboratory in Catonsville, by 1999.

At that time, it said the consolidation would cost the company $1.7 billion over the next two years. It also said there would be a $525 million pretax charge against second-quarter earnings.

Charles P. Manor, a Lockheed Martin spokesman, said the company took a $165 million charge against first-quarter earnings. "We do not anticipate further material charges against earnings," Mr. Manor said yesterday. "The remainder of the costs associated with the merger will be offset by the savings generated by the consolidation."

"These results are encouraging and consistent with our financial plan for 1995," Daniel M. Tellep, chairman and chief executive officer of Lockheed Martin, said.

"In addition, the consolidation plan announced in late June will capitalize on synergies of the Lockheed Martin merger," Mr. Tellep said.

When fully implemented in 1999, the Lockheed Martin consolidation plan is expected to yield annual savings of $1.8 billion, improve competitiveness and increase profitability, thereby enhancing shareholder value, Mr. Tellep said.

Minus nonrecurring after-tax charges, net earnings for the first six months were $520 million, up 20.6 percent from the $431 million in the first half of 1994.

Year-to-date sales were $11.25 billion, up from $10.6 billion.

Mr. Tellep listed a number of recent contracts which he said bode well for the company's long-range outlook. They include:

* A pact valued at about $1 billion to supply the fire control radar, night vision and targeting systems used in the British Army's new Apache attack helicopters.

* A $650 million contract to build a complete mobile telephone communications system for the Asia Cellular Satellite system. He said the contract also positions the company for similar opportunities elsewhere in Asia, the Middle East and Africa.

* Taking over the management of an Argentinean aircraft manufacturing and modernization center. The contract is valued $480 million.

Despite those contracts, the company reported that its total backlog of business declined slightly during the quarter to $41.6 billion from $42.9 billion at the end of the first quarter.

... ... ... ... ... Ticker ... ... ... ... ... Yesterday's

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

... ... ... ... ... LMT .. ... ... ... ... ... 62 1/2 .. .. .. - 1/4

Period ended

6/30/95 ... ... ... 2nd qtr. ... ... ... Year ago ... ... Chg.

Revenue ... ... ... $5,606,000 .. .. ... $5,562,000 .. .. +0.8%

Net Income .. .. .. ($53,000) ... .. ... $259,000 ... ... --

Primary EPS ... ... ($0.36) ... .. .. .. $1.19 ... .. ... --

... ... ... ... ... 6 mos. ... ... ... Year ago ... ... ... Chg.

Revenue ... ... ... $11,251,000 .. ... $10,598,000 .. .. .. +6.2%

Net Income .. .. .. $84,000 ... .. ... $494,000 ... ... ... -83.0%

Primary EPS ... ... $0.28 ... .. .. .. $2.27 ... .. ... ... -87.6%

Figures in thousands (except per share data)

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