Lockheed, Northrop profits up

Lockheed Martin Corp and Northrop Grumman Corp, two of the world's biggest defence contractors, reported higher-than-expected second-quarter profits on Tuesday on the back of strong fighter jet, technology and satellite sales.
Lockheed, the Pentagon's No 1 supplier, raised its full-year profit forecast well above Wall Street's estimate, while Northrop nudged up the bottom end of its forecast, as US defence spending shows no signs of slowing and the vast majority of their programs are on schedule.
"Lockheed's results should satisfy even the highest expectations in the quarter given the blow-out results from better sales and operating performance across the business," said CIBC World Markets analyst Myles Walton, in a research note. Lockheed, the world's No 1 defence contractor, reported a 34 percent increase in quarterly earnings to $778 million, or $1.82 per share, compared with $580 million, or $1.34 per share, a year earlier.
Strong sales on its fighter jet programs - the F-16, F-22 and F-35 - and lower pension costs helped boost the bottom line. Revenue rose 7 percent to $10.7 billion on higher sales in three of its four main units. The results easily beat Wall Street's average earnings forecast of $1.52 per share, on revenue of $10.28 billion, according to Reuters Estimates.
Lockheed, which also makes Patriot missiles, satellites and an array of government systems, raised its full-year earnings and revenue forecast, citing higher projected sales from its space and aircraft units.
The Bethesda, Maryland, company said it now expects full-year earnings in a range of $6.65 per share to $6.80 per share, up from a range of $6.20 to $6.35. That is above analysts' average forecast of $6.39 per share. Lockheed also forecast full-year revenue of $41 billion to $41.75 billion, up from its previous range of $40.35 billion to $41.35 billion. Analysts are expecting $41.1 billion, on average.
Northrop, the No 3 Pentagon supplier behind Lockheed and Boeing Co, notched a greater-than-expected 7 percent increase in second-quarter profit, helped by higher information technology sales and an insurance gain at its storm-hit shipbuilding unit.
It also raised the lower end of its full-year profit forecast as it projected higher sales overall and better margins. Northrop, which makes warships, nuclear submarines, unmanned surveillance planes and a range of military electronics, reported quarterly profit of $460 million, or $1.31 per share, compared with $430 million, or $1.23 per share, in the year-ago quarter. Revenue rose 4 percent to $7.9 billion.