Lockheed earns profit despite cuts
LOCKHEED Martin, the world's largest defence contractor, raised its full-year profit forecast amid US budget cuts and reported second-quarter earnings that beat analysts' estimates.
After-tax profit from continuing operations jumped 10pc to $859m (€650m) from $781m (€591m) a year earlier. Sales declined 4.3pc to $11.4bn.
Across-the-board budget cuts under a process known as sequestration have hurt Lockheed less than executives had anticipated in April, said Bruce Tanner, the company's chief financial officer.
At the time, the contractor said sales might decline this year by $825m due to the reductions.
"It's somewhat hard for us to imagine that the full impact will be realised relative to the $825m number that we estimated," Mr Tanner said. "It's not affecting us as deeply as we thought it would at the start of the year, when sequestration was first implemented."
Lockheed shares rose 2.9pc to $119.01 in New York trading. The shares had advanced 25pc this year. "We had strong operational performance and programme execution across all business areas this quarter, enabling us to increase 2013 financial guidance," said Marillyn Hewson, Lockheed's chief executive. (Bloomberg)