Lockheed Profit Soars 39% on Strong Sales

Lockheed Martin Corp. said Tuesday that third-quarter profit rose a better-than-expected 39% as the No. 1 U.S. defense contractor boosted sales of electronic systems and government satellites and deliveries of its C-130J transport planes.

But Lockheed said 2006 profit would be near the lower end of Wall Street forecasts. That sent its shares slightly lower.

Lockheed, like rival Northrop Grumman Corp., is benefiting from high defense spending, but some of its multibillion-dollar projects, such as its F-35 Joint Strike Fighter jet, are vulnerable to cuts as the Pentagon seeks to rein in spending growth.

In response, Lockheed is leading the charge among defense firms toward high-tech systems.

Sales of such systems boosted third-quarter profit. The Bethesda, Md.-based company reported net income of $427 million, or 96 cents a share, for the quarter, up from $307 million, or 69 cents, a year earlier. Revenue rose 9% to $9.2 billion.

Earnings beat analysts’ average forecast of 90 cents a share, but revenue fell a little short of Wall Street’s forecast of $9.38 billion, according to Reuters Estimates.

Lockheed shares fell $1.12 to $61.23.

The company expects 2006 earnings of $4 to $4.25 a share, at the lower end of analysts’ forecasts, which average out at $4.21. For the first time next year, Lockheed’s results will include the cost of stock options, the company said.