LOCKHEED MARTIN SLASHES 09 FORECASTS
22 Jan 09. Lockheed Martin Corporation (NYSE: LMT) today reported fourth quarter 2008 net earnings of $823m ($2.05 per diluted share), compared to $799m ($1.89 per diluted share) in 2007. Net sales were $11.1bn, compared to fourth quarter 2007 sales of $10.8bn. Cash from operations for the fourth quarter of 2008 was $997m, compared to $425m in 2007.
For the year ended December 31, 2008, net earnings were $3.2bn ($7.86 per share), compared to $3.0bn ($7.10 per share) in 2007. Net sales for 2008 were $42.7bn, a 2% increase over the $41.9 bn in 2007. Cash from operations for 2008 was $4.4bn, compared to $4.2 billion in 2007. Return on Invested Capital (ROIC) was 21.7% for 2008 compared to 21.4% in 2007.
“Our results for 2008 reflect excellent operational and financial performance across all business areas, despite the difficult economic environment,” said Bob Stevens, Chairman, President and CEO. “By holding steady to our strategy of diversifying, differentiating and delivering to enhance shareholder and customer value, our 146,000 dedicated employees demonstrated their unwavering commitment to making Lockheed Martin the world’s premier global security company.”
Summary Reported Results and Outlook
The revision in the Corporation’s projected 2009 diluted earnings per share results primarily from the net impact of the following: a higher level of projected sales and segment operating profit in our Information Systems & Global Services and Electronic Systems business segments; an increase in projected FAS pension expense related to the following updates: as a result of significant declines in interest rates during the last few weeks of December, the Corporation selected a 6.125% discount rate at the year-end 2008 measurement date versus the 7.50% assumed in the prior outlook; actual return on plan assets in 2008 of (28%) as compared to the (25%) return assumed in the prior outlook; and the benefit of $109 m in pre-funding for various pension trusts during the fourth quarter of 2008, as discussed below.
It is the Corporation’s practice not to incorporate adjustments to its outlook for proposed acquisitions, divestitures, joint ventures, or other unusual activities until such transactions have been consummated.
Balanced Cash Deployment Strategy
The Corporation continued to execute its balanced cash deployment strategy during 2008 by:
• repurchasing 6.7 m shares at a cost of $575m in the quarter and 29.0 m shares at a cost of $2.9bn in the year;
• retiring $1.0bn of long-term debt in the third quarter as a result of the floating rate convertible debt redemption and a total of $1.1bn during the year;
• making capital expenditures of $423m during the quarter and $926m during the year;
• paying cash dividends of $227m in the quarter and $737m in the year; and
• investing $38m in the quarter and $233m during the year for acquisition and investment activities.
The Corporation operates in four principal business segments: Electronic Systems; Information Systems & Global Services (IS&GS); Aeronautics; and Space Systems.
4th Quarter Year
2008 $2,934 $11,620
2007 $2,874 $11,143
2008 $369 $1,508
2007 $360 $1,410
Net sales for Electronic Systems increased by 2% for the quarter and 4% for the year ended December 31, 2008 from the comparable 2007 periods. During the quarter, higher sales volume on platform integration activities at Platform, Training & Energy (PT&E) and surface systems and undersea systems activities at Maritime Systems & Sensors (MS2) partially were offset by lower sales volume on air defense and ta