Lockheed Martin CFO Looks For New Tech Sales With Obama Administration
January 22 2009 - 9:15AM
Dow Jones News
Lockheed Martin Corp.'s (LMT) record $81 billion order backlog
at the end of 2008 puts the company in good shape as the Obama
administration settles in, the company's chief financial officer
told Dow Jones Newswires on Thursday.
Given that it takes time for newly-installed government
officials to get up and running on spending decisions, "it's nice
to have this in your hopper," Bruce Tanner said.
In 2009, he said, Lockheed's Information Technology and Global
Systems business will overtake traditional defense contracting as
the main sales-generator for the company. Tanner said Lockheed, the
biggest provider of information technology to the U.S. government,
sees significant opportunities to add business under the tech-savvy
Obama administration. A posting on the White House Web site this
week, meanwhile, highlighted the need for better cyber security in
government agencies.
"That's an important area for us," he said, adding that few
major contracts in that area have been awarded so far to any
private contractor. Last year, Lockheed won a significant contract
for biometric identification at the Federal Bureau of
Investigation, he said.
Reporting earnings on Thursday, the defense and IT giant cut its
2009 earnings outlook from a forecast a quarter ago, citing rising
pension expenses, on falling interest rates. But Tanner said the
company isn't required to make a cash contribution to employee
pensions this year since it has already met those obligations.
Lockheed now expects earnings this year to range between $7.05 and
$7.25 per share, down from a range of $7.65 to $7.90 per share.
At the same time, Lockheed increased its revenue outlook for
2009 to a range of $44.7 billion to $45.7 billion, from $44.25
billion to $45.25 billion, mainly on stronger IT business. "That's
a narrow range, given that it's on more than $40 billion in sales,"
Tanner said. He said it shows Lockheed's confidence that the new
administration won't take the knife to major defense programs this
year. U.S. President Barack Obama has said it's important for the
U.S. to maintain military strength with jet fighters, a key
business at Lockheed Martin.
Lockheed on Thursday reported fourth-quarter earnings of $823
million, or $2.05 per share, on sales of $11.13 billion, beating
Wall Street forecasts.
The year ended on a high note, Tanner said, as Lockeed achieved
record gross margins across its businesses, averaging 11.4%, up
from 10.4% the previous year.
The Bethesda, Md., company ended 2008 with $4.4 billion in cash.
Tanner said Lockheed will continue its cash deployment strategy,
with a goal to return at least 50% to shareholders, while keeping
an eye out for niche acquisitions.
-By Ann Keeton; Dow Jones Newswires; 312-750-4120;
ann.keeton@dowjones.com
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