January 26, 2012 / 11:48 AM / 6 years ago

Lockheed order backlog to cushion tough 2012

WASHINGTON (Reuters) - Lockheed Martin Corp (LMT.N), the Pentagon’s largest supplier, forecast broadly flat sales and operating profit for 2012, with a record high order backlog helping it to cope with cuts in U.S. defense spending.

Bethesda-based Lockheed, which is developing the F-35 fighter jet for the U.S. military and eight international partners, reported on Thursday lower sales and earnings for the fourth quarter of 2011, but said it received $19.8 billion in orders that boosted its backlog to a record $80.7 billion.

Fourth-quarter sales dropped nearly five percent to $12.2 billion from $12.8 billion a year ago, said Lockheed, which also builds missiles, coastal warships, satellites and transport planes for the U.S. government.

Revenues for the full year rose nearly 2 percent to $46.5 billion from $45.7 billion a year earlier, It forecast revenues between $45 billion and $46 billion in 2012.

Chairman and Chief Executive Bob Stevens said the company had a strong year financially due to its continued focus on executing U.S. and international programs, but faced more uncertainty in 2012, given the U.S. government’s plan to cut defense spending by $487 billion over the next decade.

U.S. Defense Secretary Leon Panetta is expected to explain some of the major decisions in the fiscal 2013 defense budget later Thursday, including plans to put off production of 179 additional F-35 fighter jets over the next five years.

“We will need to remain agile in 2012 given the uncertainties ahead, but I am confident that our workforce and diversified portfolio will enable us to continue to deliver value to our customers and shareholders,” Stevens said.

Net earnings from continuing operations dropped 15 percent to $698 million in the fourth quarter from $821 million a year earlier, edging up slightly to $2.67 billion for the full year from $2.61 billion. The results reflected higher pension expense adjustments, a decrease in research and development (R&D) tax credits, and premiums on the early extinguishments of debt.

    Earnings on per share basis from continuing operations fell to $2.14 in the fourth quarter, down from $2.28 a year earlier, but still above analyst estimates of $1.94.

    Operating profit fell slightly to $3.98 billion for the full year from $4.05 billion in 2010, and would likely fall in that same range in 2012, the company said.

    Separately, U.S. defense contractor Raytheon said on Thursday it expected adjusted earnings to fall 5-8 percent this year, as it reported a 12 percent rise in adjusted fourth-quarter earnings per share.

    (Reporting By Andrea Shalal-Esa, Editing by Mark Potter)

    Corrects to show comparable estimate with earnings from continuing operations in second bullet point and 8th paragraph.

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