Tags: US | Earns | Lockheed

Lockheed Martin Profit Falls on Healthcare Charge

Wednesday, 21 Apr 2010 07:42 AM

Defense contractor Lockheed Martin Corp. said its first-quarter earnings fell 18 percent after it was hit by a big charge due to the recent U.S. healthcare overhaul.

Lockheed also lowered its 2010 net income outlook by 15 cents per share because of the elimination of a tax deduction for Medicare-related expenses.

Lockheed earned $547 million, or $1.45 per share, down from $666 million, or $1.68 per share a year ago. The first-quarter results included a 10 cent gain from higher investment income.

Revenue rose 3 percent to $10.64 billion from $10.37 billion.

The results still beat Wall Street profit forecasts of $1.34 per share and was in line with revenue estimates of $10.61 billion, according to a survey by Thomson Reuters.

"It was actually a pretty clean operational quarter for us," said Bruce Tanner, Lockheed's chief financial officer.

Lockheed Martin, based in Bethesda, Md., is the Pentagon's biggest supplier of military equipment such as fighter jets, missiles and computer technology.

Sales were up or flat at all of Lockheed's four business units, but only one managed to post an overall profit for the quarter.

Sales at Lockheed's marquee aeronautics division, maker of the C-130J cargo jet and the F-35 fighter plane grew 5 percent on a building amount of work on the F-35, which is expected to join the Pentagon's fighter fleet soon. But profit slipped on the wind-down of pricey F-22 jet, a program that was capped last year at lower levels than originally planned.

Profit was also lower in Lockheed's units that make missile equipment and information technology for the military and civil governments. Profit in its space division, which builds satellites, was largely flat.

Tanner said Lockheed took a $96 million charge after Congress passed legislation in March that made broad changes to health insurance. The bill cut a tax deduction for the reimbursement of retiree prescription drug benefits.

The company now expects 2010 earnings of $7 to $7.20 per share, down from a January forecast of $7.15 to $7.35 per share.

Analysts surveyed by Thomson Reuters expect a 2010 profit of $7.19 per share.

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Defense contractor Lockheed Martin Corp. said its first-quarterearnings fell 18 percent after it was hit by a big charge due to therecent U.S. healthcare overhaul.Lockheed also lowered its 2010net income outlook by 15 cents per share because of the elimination of atax...
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Wednesday, 21 Apr 2010 07:42 AM
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