Lockheed Martin Corp. said Tuesday third-quarter profit rose a better-than-expected 39 percent as the No. 1 U.S. defense contractor boosted sales of electronic systems, government satellites and deliveries of its C-130J transport planes.
Lockheed, which makes fighter jets, cargo planes, Patriot missiles and sells a range of technology services, also raised its full-year profit forecast, largely due to a one-time gain from a stock investment, and made its first forecast for 2006 profit, within the range of Wall Street's estimates.
The Bethesda, Maryland-based company reported profit of $427 million, or 96 cents per share, for the quarter. That compares with $307 million, or 69 cents per share, last year. Revenue rose 9 percent to $9.2 billion.
Earnings beat analysts' average forecast of 90 cents per share, but revenue fell a little short of Wall Street's forecast of $9.38 billion, according to Reuters Estimates.
The rise in sales of high-tech systems comes as defense contractors try to move away from traditional military hardware projects, which are vulnerable to cuts as the Pentagon looks to trim defense spending after several years of sharp growth.
Lockheed's shares are up about 12 percent so far this year, ahead of the 9 percent rise in the Standard & Poor's Aerospace & Defense index. Lockheed shares are trading around 15 times forecast 2006 earnings, a little below the average of 16 times for the index.
Looking forward, Lockheed forecast earnings in a range of $3.85 to $3.95 per share for this year, up from its previous forecast of $3.60 to $3.75 per share. The increase is mostly due to a gain from the sale of shares in British satellite operator Inmarsat, which went public in June. Analysts were expecting earnings of $3.78 per share, on average.
Lockheed forecast full-year revenue of $37 billion to $37.5 billion, a touch shy of analysts' average forecast of $37.7 billion.
For 2006, Lockheed forecast earnings of $4.00 to $4.25 per share, broadly in line with analysts' average forecast of $4.21. For the first time next year, Lockheed's results will include the cost of stock options, the company said.
The company forecast 2006 revenue of $38 billion to $39.5 billion, in line with analysts' forecast of $39.5 billion.