Lockheed profit up 10% for quarter Loral deal helps boost earnings to $299 million

July 24, 1996|By Ted Shelsby | Ted Shelsby,SUN STAFF

With a healthy boost in its defense electronics business from the acquisition of the bulk of Loral Corp. earlier this year, Lockheed Martin Corp. yesterday reported higher-than-expected second-quarter earnings.

Net income totaled $299 million for the three months ended June 30, up 10 percent from the $273 million in the same period last year. The year-earlier number excludes a $525 million pretax charge for merger-related expenses.

On a per share basis, that was equal to $1.33, compared with $1.22 a year ago.

"That's better than we expected," said Paul H. Nisbit, president of JBA Research Inc. in Newport, R.I. "We had them coming in at $1.25, and the consensus among most analysts was $1.27 a share."

Nisbit said it appears the company is achieving some of the savings related to last year's merger of Lockheed Corp. and Martin Marietta Corp. "a little earlier than expected."

Sales rose 26 percent to $7.08 billion during the quarter, up from $5.6 billion in the comparable period last year.

Norman R. Augustine, vice chairman and chief executive, said the consolidation is meeting financial targets.

"We are on schedule and, in many cases, ahead of our plan," he said. "Over the past year, we have already documented more than $500 million in savings from our initial consolidation steps."

Three of the company's five operating sectors -- Space and Strategic Missiles, Electronics, and Information and Technology Services -- posted higher sales and earnings before taxes.

Sales of Electronics, due primarily to the businesses acquired from Loral, rose 152 percent during the quarter to $2.1 billion.

The Aeronautics sector, which includes the rocket launchers and jetliner thrust reverser businesses at Middle River, posted a 19 percent drop in sales and a 9 percent dip in earnings before taxes.

The company attributed the decline to fewer deliveries of F-16 fighter planes from its plant in Fort Worth, Texas, and lower sales of C-130 cargo planes and P-3 submarine patrol planes.

Sales of the company's Energy and Environmental Sector, Materials businesses and other segments as a group rose one percent, but profits were down 35 percent due to the timing of award fees associated with Department of Energy management contracts.

For the first six months, net income totaled $571 million, equal to $2.55 a share, up from $520 million, or $2.34 a share. The 1995 number excludes $436 million in merger-related expenses. Six-month sales totaled $12.2 billion, up from $11.25 billion in the same part of 1995.

Pub Date: 7/24/96

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