Lockheed Profit Falls; Interest Costs Blamed

Lockheed Corp. reported Monday a 14% drop in earnings in the fourth quarter and only a 1.7% gain for the year because of higher interest costs and expenses in developing a turn-of-the-century fighter for the Air Force.

The company also said the Pentagon’s increased insistance that companies share the cost of developing projects is causing uncertainty about future profits.

The Calabasas-based aerospace giant earned $110 million for the three months ended Dec. 28, compared to a year earlier when it earned $128 million. Revenue rose 4.8% to $2.86 billion from $2.73 billion.

For the full year, the company earned $408 million on revenue of $10.27 billion, compared to 1985 when it netted $401 million on revenue of $9.53 billion.

Lockheed’s interest costs doubled in the fourth quarter to $28 million and were up by 25% for the year to $66 million. Most of that increase was related to Lockheed’s $1.18-billion takeover last August of the Nashua, N.H.-based defense electronics firm Sanders Associates.

Lockheed also cited its expenses in developing a prototype of the advanced tactical fighter, which is to be the Air Force’s main fighter into the middle of the next century.