Lockheed Martin 4Q profit steady, boosts guidance

(AP) — Two of the nation's defense companies posted higher fourth-quarter profits Thursday, boosted by the sale of fighter jets, cargo planes and missiles to the Pentagon and other militaries.

Lockheed Martin Corp.'s earnings edged up slightly as it made more money off the sale of C-130J cargo jets and its F-35 and F-22 fighter plane programs. Raytheon Co., a major supplier of defense electronics, saw its profit grow 19 percent behind sales of its Patriot missile defense systems to overseas governments and missiles to the Navy.

Both companies topped Wall Street expectations with their profits. But their 2010 outlooks were short of analyst forecasts.

Lockheed, whose products range from missiles to mail sorting equipment and is one of the biggest suppliers of fighters jets to worldwide militaries, said it earned $827 million, or $2.17 per share in the last three months of 2009. That was up from $823 million, or $2.05 per share, a year ago.

The company, based in Bethesda, Md., reduced its outstanding stock through about $500 million worth of fourth-quarter buybacks, bumping up its earnings per share results.

Revenue rose 13 percent to $12.5 billion on better sales of military planes and government space equipment.

One-time items including a $114 million pension adjustment reduced earnings by 16 cents a share.

Lockheed's earnings beat the consensus analyst forecast of $1.99 per share on revenue of $12.47 billion. The earnings estimates typically exclude one-time items.

The company also raised its 2010 earnings outlook, saying it now expects results between $7.15 to $7.35 a share. Much of that gain will come from a lower share count, including company plans to buy back about $1 billion worth of stock, according to Bruce Tanner, Lockheed's chief financial officer. Lockheed held firm to its operating profit and sales forecasts.

Analysts expect 2010 earnings of $7.41 per share.

"We had a really solid quarter that was a good base for the year," Tanner said in an interview.

Lockheed shares fell $1.07, or 1.3 percent, to $76.06 in afternoon trading.

Raytheon, based in Waltham, Mass., posted net income of $504 million, or $1.30 per share, in the last three months of 2009, up from $421 million, or $1.01 per share, a year earlier.

Sales grew 10 percent to $6.67 billion, helped by gains in overseas sales of Patriot systems and missiles for the Navy.

Analysts expected earnings of $1.23 per share on sales of $6.64 billion.

But the company's 2010 outlook came in below Wall Street forecasts, helping push the company's stock down $1.39, or 2.6 percent, to $52.07 in afternoon trading.

Raytheon reaffirmed its 2010 outlook for earnings of between $4.75 to $4.90 per share. Analysts expect $4.99 a share.

Like the rest of the defense industry, Lockheed and Raytheon faces Pentagon budgets that are expected to grow more moderately than the big gains in weapons spending during the past decade.

Tanner said the company is awaiting the release of President Obama's 2011 fiscal year budget next week, which will lay out defense spending priorities for the coming year.