Lockheed Martin Corp. on Tuesday reported better-than-expected profit for the first quarter despite a decline in revenue.
The nation's largest defense contractor said net income grew 94% to $105 million, or 25 cents a share, boosted by payments for the international F-16 jet fighter program and surplus real estate, from $54 million, or 14 cents a share, a year earlier.
Operating earnings, which exclude one-time items, were 23 cents a share. Analysts on average pegged Lockheed at a profit of 21 cents, according to First Call/Thomson Financial. Net sales fell 10% to $5.01 billion.
"This quarter we met or exceeded our financial expectations and are on track to achieve the goals we established for 2001," said Chief Executive and Chairman Vance Coffman.
"They were pretty strong in terms of earnings," said Sam Pearlstein, an analyst at First Union. "We're surprised that there was some revenue decline in space systems and aeronautics, but certainly the outlook was unchanged from where we were a couple months ago."
Margins improved at the company's systems integration business, which makes electronics systems for the military, and the space systems business, which makes and launches satellites.
Those operations generated lower revenue but increased cash flow.
The aeronautics unit, which makes the F-16, also reported an improved margin, with lower sales and flat earnings before interest and taxes.
"Cost reductions were very important," said Chris Mecray, an analyst with Deutsche Banc Alex. Brown, who rates Lockheed shares as "market perform." "It was a key driver" of profitability, he told Bloomberg News.
Backlog was unchanged from the $56.4 billion reported at the end of 2000. Lockheed recorded $5 billion in orders during the first quarter, including the CVN 77 aircraft carrier warfare systems integration, classified activities, and Aegis missile weapons system production.
Lockheed also reaffirmed guidance for the full year, seeing a 25% to 35% increase in 2001 earnings from continuing operations.
Shares of Lockheed rose $1.39 to close at $35.89 on the New York Stock Exchange.
At a Glance
Other earnings, excluding one-time gains or charges unless noted, include:
* Cheap Tickets Inc.'s first-quarter profit fell 49% to $1.18 million, or 5 cents a share, a penny better than forecasts, as the seller of discount airline tickets and other travel services increased spending on television and other advertising. Revenue rose 17% to $24.9 million.
* Chiquita Brands International Inc. said earnings plunged 88% to $4.1 million, or a penny a share, citing lower banana prices in North America and Japan and the strong dollar. Sales fell 12% to $577.3 million.
* Freddie Mac's first-quarter profit grew 18% to $719 million, or 96 cents a share, on a boom in lending and refinancing as mortgage rates hovered at the lowest in two years. Revenue rose 18% to $1.25 billion.
* Goodyear Tire & Rubber Co., the largest U.S. tire maker, had its second quarterly loss in a row and said it will fire 600 more workers this year because of rising expenses and declining production by auto makers. Goodyear posted a loss of $3.5 million, or 2 cents a share, contrasted with net income of $48.2 million, or 30 cents, a year ago, as sales fell 6.8% to $3.4 billion.
* Park Place Entertainment Corp., operator of Caesars Palace, Bally's and other casinos, said first-quarter profit fell 13% to $45 million, or 15 cents a share. The results beat analyst expectations of 11 cents. Revenue fell a slight 0.9% to $1.19 billion.
* RadioShack Corp.'s first-quarter profit dropped 4% to $65.1 million, or 33 cents a share, meeting reduced forecasts, as it cut prices on computers and made less on wireless telephones. Sales rose 8.8% to $1.14 billion. The electronics retailer said second-quarter earnings also will decline.
* Starwood Hotels & Resorts Worldwide Inc., the largest hotel owner, said first-quarter profit rose 17% to $62 million, or 30 cents a share, matching forecasts, but warned that full-year results will fall below expectations as business travel declines. Higher room rates helped results in the latest quarter. Revenue rose 1.2% to $1.01 billion.
Please see EARNINGS, C6