Lockheed Martin's Reliance on Pentagon Foreshadows Tough Year Ahead

The Pentagon's number one defense contractor Lockheed Martin reported an uptick in profit in the third quarter as a result of savings in its pension liabilities. But its largest division, aeronautics, continues to struggle and its reliance on the Pentagon is under scrutiny. Profits came in at $2.76 a share, lower than a year ago but better than expectations. Overall revenue dropped to $11.1 billion, worst than estimates, and each of its five divisions saw declines. CEO Marillyn Hewson said despite the global challenges, Lockheed's program and operational performance were strong. But the question is, will it continue in the coming year. It now expects 2015 sales to decline at a single digit rate because the Pentagon might put the production of some of the most expensive weapon systems on hold.