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02 Feb 05. As the reporting season started for the major U.S. defnse companies, Boeing kicked off by announcing a strong recovery in its commercial aircraft operations with deliveries expected to rise in each of the next three years.

The FT reported that the group reported an 84 per cent drop in net profit from $1.1bn to $186m in its fourth quarter, however, which was hit by heavy one-off charges in its commercial aircraft operations. For the full year group net profits rose from $718m to $1.87bn with turnover increasing by 4 per cent from $50.3bn to $52.5bn. Adjusted earnings from operations rose by 53 per cent from $1.3bn to $2bn. Harry Stonecipher, Boeing chief executive, said the group’s strongly improved results last year had been supported by the “outstanding profitability” of its defence operations, which delivered 9.6 per cent operating margins, up from 4.9 per cent a year earlier. Earnings per share are forecast to rise from $2.30 last year to $2.40-$2.60 this year and to $3-$3.20 in 2006.

Integrated Defense Systems delivered double-digit revenue growth and excellent margins; captured more than $30bn in orders including the U.S. Navy’s Multi-Mission Maritime Aircraft and a $6bn expansion of U.S. Army’s Future Combat Systems program; installed eight GMD interceptors. Operating margins rose to 9.6 percent as all four IDS segments delivered improved performance. During the fourth quarter, IDS revenues increased 5 percent to $7.6bn driven by growth in its Network Systems and Support Systems segments. IDS produced strong fourth-quarter operating margins of 8.9 percent, up from 8.3 percent in the fourth quarter of 2003 despite the $80m charge taken for the USAF 767 Tanker program, which partially offset improved operating performance in all four segments.

Boeing continued to suffer heavy losses in its space operations with launch and orbital systems reporting operating losses of $342m after losses of $1.75bn in 2003. The operation is forecast to break even in 2005 after tough restructuring.

On 27 January Lockheed Martin Corporation (NYSE: LMT – News) reported fourth quarter 2004 net earnings of $372m ($0.83 per diluted share), (2003: $344m, $0.77). Net sales were $10.0bn, an 11% increase over fourth quarter 2003 sales of $9.0bn.

“We had excellent performance in 2004, resulting from the dedicated efforts of our workforce,” said Bob Stevens, President & CEO. “We will continue to deliver critical capabilities to our customers and focus on the fundamentals of our business while improving returns on invested capital and deploying cash to enhance shareholder value.”

Net earnings for the quarter ended December 31, 2004 were $372m ($0.83 per share). The fourth quarter results include an after-tax loss of $154m ($0.34 per share) for the effect of previously disclosed unusual items including a charge related to the Pit 9 litigation, the cost of early retirement of debt, a gain on the sale of the New Skies Satellites investment and a gain on the sale of the COMSAT General business. The fourth quarter also included a $144m ($0.32 per share) reduction in income tax expense resulting from the closure of an Internal Revenue Service examination. These items reduced net earnings by $10m ($0.02 per share) in the fourth quarter.

Net earnings for 2004 were $1.3bn ($2.83 per share), including the fourth quarter net charge of $10m ($0.02 per share).
Net earnings for the quarter ended December 31, 2003 were $344m ($0.77 per share) including an $8m ($0.02 per share) gain from the sale of a business. Net earnings for 2003 were $1.1bn ($2.34 per share), including a net charge of $102m ($0.22 per share) primarily associated with the early retirement of debt and the fourth quarter sale of a business.

Net sales for Aeronautics decreased slightly for the quarter and increased 15% for the year ended December 31, 2004 from the 2003 periods. In the quarter, Combat Aircraft sales were essentially flat as

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