Lockheed Earnings Drop 31% but Still Top Forecasts
Lockheed Martin Corp. on Thursday reported sharply lower fourth-quarter profit, but it still exceeded Wall Street forecasts as sales at its systems integration, space systems and aeronautics businesses increased.
Lockheed, the world’s largest defense contractor and maker of the F-16 fighter, also raised its growth estimate for 2001 earnings, targeting 25% to 30% improvement from 2000 levels, up from an earlier estimate of 20%.
For the fourth quarter, Lockheed’s operating earnings declined 31% to $157 million, or 38 cents a share, as revenue increased 8.8% to $7.6 billion. Analysts had anticipated earnings of 36 cents, according to First Call/Thomson Financial.
The earnings decline was partly due to a drop in profit at its space systems division, which makes Atlas rockets, despite higher revenue at the unit.
For the full year, Lockheed reported operating earnings of $1.07 a share, down 29% from 1999.
The company is cutting costs and selling assets to pare down debt used to finance a series of acquisitions in the 1990s. During the fourth quarter, Lockheed completed the sale of its aerospace electronics systems business to BAE Systems for $1.67 billion.
Net debt fell by about $3 billion during the year. The order backlog at year-end totaled $56.4 billion, up from $45.9 billion a year earlier. Lockheed closed the year with $9.96 billion in total long-term debt, down from $11.48 billion a year earlier.
“We are delighted with the accomplishments that Lockheed Martin achieved in 2000,” Chief Executive Vance Coffman said. “We exceeded all financial goals set for 2000, including achieving record orders and backlog, record free cash-flow generation, substantial debt reduction, and the receipt of fair value for our divestitures.”
At a Glance
Other earnings, excluding one-time gains or charges unless noted, include:
PHARMACEUTICALS:
* Alza Corp.’s operating earnings climbed 130% to $63 million, or 25 cents a share, in its fourth quarter, a penny better than expectations, as sales jumped 78% to $199 million. Sales of Alza’s flagship incontinence drug Ditropan XL more than doubled to $52.6 million from $25.1 million.
* American Home Products Inc. reported a 17% rise in fourth-quarter operating earnings to $704.3 million, or 53 cents a share, but added that it took a larger-than-expected charge of $7.5 billion to cover all remaining liability to former users of two diet drugs once used in the fen-phen “cocktail.” Sales rose 15% to $3.51 billion. The company has already reached a national settlement with tens of thousands of people who sued the company and alleged that it failed to give adequate warnings on the dangers of diet drugs used in fen-phen. The company said it has settled with about 80% of the estimated 50,000 patients who had opted out of the settlement, and said the new charge against earnings was sufficient to settle with everyone else.
* Eli Lilly Co.’s fourth-quarter profit rose 14% to $767.3 million, or 61 cents a share, matching Wall Street estimates. Sales rose 9.1% to $2.98 billion.
* Schering-Plough Corp.’s profit rose 13% to $571 million, or 39 cents a share. Sales rose 6% to $2.4 billion, led by allergy drug Claritin and its hepatitis C drugs.
TECHNOLOGY:
* ExciteAtHome Corp. reported a fourth-quarter loss of $36 million, or 9 cents a share, a penny better than analysts expected, contrasted with a profit of $500,000 a year ago. Revenue rose 31% to $169.1 million.
* JDS Uniphase Corp.’s operating profit rose 17.5% in its fiscal second quarter to $208 million, or 21 cents a share, 2 cents better than forecasts, as revenue surged 161% to $925 million. The company also said sales in fiscal 2001 may be on the low end of the range of its previous forecast, which predicted growth of 115% to 120%.
* Qualcomm Inc. said earnings grew 10% to $231.6 million, or 29 cents a share, in its fiscal first quarter, beating forecasts by a penny even as revenue declined 10% to $684 million.
* SBC Communications Inc.’s profit rose 5% to $2 billion, or 57 cents a share, on a 9% rise in revenue to $14 billion. Data services sales surged 44%, while wireless revenue grew 17%. SBC, the first local phone company to win regulatory approval to offer long-distance service in multiple states, said it will file an application to enter California’s long-distance market in the second quarter.
* Webvan Group Inc. said its fourth-quarter loss widened to $109.1 million, or 23 cents a share, from $56.1 million, or 15 cents, as sales rose more than fourfold to $84.2 million.
OTHER INDUSTRIES:
* Baxter International Inc.’s fourth-quarter profit grew 17% to $270 million, or 90 cents a share, matching forecasts, on a 9% rise in sales to $1.93 billion.
* Starbucks Corp. said profit jumped 41% in its fiscal first quarter to $49 million, or 25 cents a share, exceeding Wall Street forecasts by 2 cents. Revenue gained 26% to $667 million, boosted by higher prices and demand for holiday gift items. Sales at stores open at least a year rose 10%.
