updated 1/27/2005 8:49:59 AM ET 2005-01-27T13:49:59

Lockheed Martin Corp., the world's top defense contractor, on Thursday said fourth-quarter earnings rose 8 percent, driven by strength in operating profit across all of its segments.

Quarterly earnings rose to $372 million, or 83 cents a share, from $344 million, or 77 cents a share, last year. Earnings for the latest period include items which reduced earnings by $10 million, or 2 cents a share. The year-ago quarter includes a gain of $8 million, or 2 cents a share, from the sale of a business.

Revenue rose to $9.97 billion from $8.98 billion a year ago.

Analysts were looking for Lockheed Martin to earn 75 cents a share on sales of $9.19 billion.

Fourth-quarter sales in the aeronautics segment fell slightly in the quarter to $3 billion, but operating profit rose 15 percent on delivery of C-130J aircraft and higher volume on the F-35 program. Electronic systems sales rose 19 percent to $3.11 billion, as operating profit rose 35 percent, driven by increases in tactical missile and air defense programs and surface systems programs. During the fourth quarter, space systems revenue rose 24 percent to $1.8 billion, with operating profit up 23 percent due to additional commercial satellite deliveries.

Lockheed Martin said sales at integrated systems and solutions rose 11 percent to $1.01 billion, with an 8 percent increase in operating profit as a result of a higher volume of intelligence, defense, and information assurance activities. Fourth-quarter sales at the company's information and technology services segment rose 7 percent to $1.04 billion, as operating profit increased 7 percent on volume.

For the year, the company earned $1.3 billion, or $2.83 a share, including the fourth-quarter charge, up from $1.1 billion, or $2.34 a share, including a charge of $102 million, or 22 cents a share. Revenue for the year rose to $35.5 billion from $31.8 billion. Analysts expected the company to earn $2.75 a share on sales of $34.75 billion.

Lockheed Martin expects to report 2005 earnings of $3.05 to $3.30 a share on sales of $36 billion to $37.5 billion, compared with analysts' current estimates for earnings of $3.32 a share on sales of $36 billion.

The company said the outlook reflects improved operating performance and increased volume related to recent new business and the ongoing benefit of early retirement of debt during the fourth quarter of 2004, offset by an increase in the FAS/CAS pension adjustment and inclusion of estimated stock option expense.

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