Lockheed Records Net Loss for the 4th Quarter
Lockheed Martin Corp., the biggest defense contractor, on Friday posted a net loss for the fourth quarter after taking more than $1billion in charges to exit the telecommunications business.
But the company posted an increased profit on an operating basis and said results in 2002 will be higher than Wall Street’s estimates.
Lockheed reported a net loss of $1.51billion, or $3.49 a share, contrasted with earnings of $89million, or 21 cents, a year ago. The loss dragged Lockheed into the red for the full year, despite profit in the three other quarters. Its 2001 loss of $1.05billion was double its loss of $519 million in 2000.
Wall Street analysts said the net loss was expected and operating earnings were in line with most expectations, beating the average estimate.
“The quarter was basically as expected from an operating standpoint,” said Christopher Mecray, analyst at Deutsche Bank Alex. Brown. Lockheed shares gained 59 cents to close at $50 on the New York Stock Exchange.
“Operationally, 2001 was a year of very solid achievements,” said Robert Stevens, president and chief operating officer. He noted a number of developments, including winning the F-35 fighter contract and starting low-rate initial production of the F-22 fighter.
The results for the quarter represented a previously reported loss from discontinued operations of $3.15 a share for exiting the telecommunications business, including a $1.3-billion charge.
Excluding items, the company posted operating earnings of 49 cents a share on a pro forma basis, compared with 38 cents a year ago.
Net sales were roughly flat at $7.33billion, compared with $7.32billion a year ago.
The company ended the year with a record backlog of $71.3 billion. It recorded orders of $40.1 billion, including orders for the F-35 fighter jet, during the year.
For 2002, Lockheed expects to report earnings of $2.45 to $2.50 a share from continuing operations. Analysts now estimate Lockheed’s 2002 earnings at $2.17 a share, according to Thomson Financial/First Call.
Lockheed’s fourth-quarter loss was expected on Wall Street after the company’s announcement in December that it would exit the telecommunications business, selling stakes in mobile satellite networks such as Intelsat, Inmarsat and New Skies.
On Friday, Lockheed executives said they are looking into strategic solutions for the commercial satellite business, which they said has under-performed because of a deteriorated market. Pressed for details by J.P. Morgan analyst Joe Nadol, Stevens declined to say whether a divestiture was in order.
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Other earnings news:
* Alaska Air Group Inc., parent of Alaska Airlines, said its fourth-quarter loss widened to $36.4million, or $1.37 a share, from $28.9million, or $1.09, a year earlier. The latest results include federal aid of $52.3million before taxes as part of a U.S. plan to help airlines after the Sept. 11 terrorist attacks. Sales fell 13% to $462.2million as air travel demand, already reduced by lower corporate spending in the U.S. recession, declined further after the attacks.
Excluding government aid and $10.2 million in expenses related to eliminating some aircraft from the fleet of the company’s commuter unit, Horizon Air, Alaska Air Group had a fourth-quarter loss of $62.9 million, or $2.37 a share. The carrier was expected to lose $2.21 a share, based on the average estimate of analysts surveyed by Thomson Financial/First Call.
* Insurance company CNA Financial Corp. forecast a fourth-quarter net loss, contrasted with a net profit a year earlier, hurt by charges for restructuring and losses from its exposure to struggling energy firm Enron Corp. CNA said it expects a fourth-quarter net loss of $20million to $35million, contrasted with net income of $193million in the year-earlier period.
