Gains Lift Lockheed Martin

Sales rise 9% in the first quarter and top estimates.
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Updated from 7:49 a.m. EDT

Earnings rose 60% in

Lockheed Martin's

(LMT) - Get Report

first quarter, as higher sales and a pair of gains helped lift the bottom line.

Lockheed earned $591 million, or $1.34 a share, in the quarter, compared with $369 million, or 83 cents a share, a year ago. The latest quarter had a net gain of $150 million, or 22 cents a share, from the sale of stock in Imarsat and Space Imaging LLC. It also had stock-options expense of 4 cents a share.

Analysts were forecasting earnings of $1.14 a share in the most recent quarter. About 14 cents of the 22-cent net gain was embedded in their forecasts.

The stock rose 21 cents to $77.80 in premarket trading Tuesday.

First-quarter sales rose 9% to $9.21 billion, beating the Thomson First Call consensus estimate of $9.03 billion. In the biggest segment, systems and IT, sales rose to $4.57 billion from $4.06 billion, while sales fell to $2.67 billion from $2.77 billion in aeronautics. Sales in space systems were $1.97 billion, up from $1.66 billion.

The systems and IT division comprises electronics systems, integrated systems and solutions, and information and technology.

"In Electronic Systems, the increase in sales was primarily attributable to higher sales volume in air defense programs at Missiles & Fire Control, platform integration activities and simulation and training programs at Platform, Training & Transportation Solutions, and tactical systems and undersea systems programs at Maritime Systems & Sensors. In IS&S, the increase was primarily attributable to higher volume and performance related to intelligence, defense and information assurance activities. In I&TS, higher volume in Information Technology more than offset lower volume on NASA programs and Defense Services activities," the company said.

For 2006, Lockheed raised its earnings estimate to $4.65 to $4.85 a share from previous guidance of $4.50 to $4.75 a share. The company said its return on invested capital for the year should be 14.8%, up from its old guidance of 14.5%. It left sales guidance intact at $38 billion to $39.5 billion.

Analysts are forecasting earnings of $4.77 a share on sales of $39.3 billion in the full year.