Lockheed might take $400 million charge

Maryland Watch

November 04, 1998

Bethesda-based Lockheed Martin Corp. expects to take a fourth-quarter charge of as much as $400 million to change the way it accounts for development costs, analysts said yesterday.

Lockheed Martin also told analysts and investors that its planned $8 billion sale of F-16 fighters to the United Arab Emirates may slip into next year.

The two items will affect fourth-quarter results, with the charge reducing net income and the delayed sale of F-16 fighters hurting revenue and earnings. Analyst Byron Callan of Merrill Lynch & Co. cut his rating on the stock to near-term "accumulate" from near-term "buy."

Lockheed Martin shares fell $2.8125, to $109.0625, yesterday.

At an investor and analyst meeting in Fort Worth, Texas, yesterday, the company said its F-16 fighter sale to the Emirates could slip into the first half of next year because it is still in negotiations about release of the source code for the F-16's electronic warfare system, Callan wrote in a report.

Lockheed Martin had previously said it was expecting to complete the sale in the fourth quarter. Lockheed Martin will get about $5 billion of the total F-16 sale.

Pub Date: 11/04/98

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