Lockheed's net boosted by accounting magic

Maryland Watch

November 12, 1998

Lockheed Martin Corp., the second-largest U.S. aerospace and defense company, has revealed that one-fourth of its third-quarter per-share earnings came from an accounting adjustment.

The disclosure, in a Securities and Exchange Commission filing, caused Lockheed Martin shares to fall $5.0625, or 4.7 percent, to $101.9375, in trading of 2.25 million shares -- more than twice the three-month daily average.

The change was not disclosed in Lockheed Martin's third-quarter earnings news release -- other than to say the earnings reflected an improvement in the Atlas rocket program -- or in a conference call with analysts and selected investors.

The maker of F-15 and F-22 fighters, Titan rockets and C-130JJ transport planes said in its quarterly filing that the accounting adjustment increased net income by $78 million, or 41 cents a share, to $318 million, or $1.67 a share. In the year-ago quarter, Bethesda-based Lockheed had net income of $331 million, or $1.51 a share. A significant improvement in its Atlas II rocket program enabled the company to transfer some of the reserves it had set aside for the program to earnings.

Pub Date: 11/12/98

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