Lockheed Martin Corp.'s (LMT) fourth-quarter income dropped 29% as the defense contractor posted a handful of special charges, as well as weaker results from its space systems and electronics systems businesses.
U.S. defense contractors have struggled to define the future size and shape of their operations due to uncertainty over Pentagon budget cuts. Lockheed Martin, the largest in its sector by sales, is viewed as one of the most vulnerable to cuts because of its role in large projects, and last year said it would cut thousands of jobs amid the belt-tightening.
The sector's efforts to boost overseas sales continue. Last month, Japan selected Lockheed to provide its F-35 Joint Strike Fighter as the country's next-generation fleet. The contract was valued at about $4 billion, one of the world's largest military contracts last year. Lockheed Martin also has seen sales and interest in its products from the Middle East increase due to increased nervousness about Iran's nuclear program and in the wake of the Libyan conflict.
Lockheed Martin posted a profit of $683 million, or $2.09 a share, down from $961 million, or $2.67 a share, a year earlier. The latest results included a charge of 20 cents related to pensions, 11 cents less research and development tax credits from the year earlier and 9 cents from early debt extinguishment costs. The year earlier period included 8 cents in consolidation costs. Earnings from continuing operations fell to $2.14 from $2.28 cents.
Revenue fell 4.3% to $12.21 billion.
Analysts surveyed by Thomson Reuters expected earnings of $1.94 a share on revenue of $12.31 billion.
Gross margin edged down to 8.1% from 8.3%.
In the aeronautics segment, profit rose 11% as revenue increased 0.7%. Sales at the electronics-systems business sank 7.8% while earnings slipped 12%.
The information systems and global solutions unit saw revenue decline 3.5% but earnings were up 28%. Space systems revenue fell 7.4% and earnings shrank 7.5%.
The company forecast 2012 earnings of $7.70 to $7.90 on sales of $45 billion to $46 billion. Analysts expected a profit of $7.77 on revenue of $46.2 billion.
Shares of Lockheed Martin closed Wednesday at $81.73 and were inactive premarket. The stock has risen 7.1% over the past three months.
-By Ben Fox Rubin, Dow Jones Newswires; 212-416-3108; email@example.com;