Lockheed Martin Boost Profit Guidance

By Doug Cameron

Lockheed Martin Corp. raised its full-year sales and profit guidance as it works through a backlog of more than $147 billion in combat jets, missile defense systems and classified military hardware.

The world's largest defense company by revenue reported higher profit margins across most of its businesses despite the impact of pandemic-driven slowdowns that reduced production of its F-35 fighter plane and other products.

Military contractors are preparing for a return to flat or declining defense budgets after years of higher spending. The company plans to buy rocket motor specialist Aerojet Rocketdyne Holdings Inc. for $5 billion to bolster its position in fast growing segments such as space and hypersonic missiles.

The defense industry has been one of the U.S. economy's most resilient sectors during the pandemic, with its designation as an essential industry allowing plants to avoid shelter-in-place orders and continue operation. The Pentagon also has accelerated contract payments to help the sector's smaller suppliers.

The twin moves helped Lockheed Martin boost sales by 7% in the fourth quarter to $17 billion, with full-year revenue climbing to $65.4 billion. It expects sales to rise as high as $68.5 billion this year, above guidance issued last October.

Profit in the latest quarter rose to $1.79 billion, with earnings per share rising to $6.38 from $5.29, slightly below the consensus among analysts polled by FactSet.

Lockheed Martin expects profit this year to rise as high as $26.30 a share from $24.50 in 2020, just ahead of analysts' expectations, with a cash flow forecast also ahead of consensus.

Its shares were down 0.4% in premarket trade.

Write to Doug Cameron at doug.cameron@wsj.com

(END) Dow Jones Newswires

January 26, 2021 08:32 ET (13:32 GMT)

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