Lockheed Shows Profit Hike for 4Q, FY 2015 to Top Wall Street Estimates

lockheed martinLockheed Martin (NYSE: LMT) — one of 30 companies listed in Executive Mosaic’s GovCon Index — has reported fourth quarter earnings per share of $3.01 and $11.46 for its fiscal year 2015 to exceed the consensus estimates of Wall Street analysts for both figures by 7 cents and 8 cents respectively.

Fourth quarter earnings topped the prior year period by 19 cents and the full year figure came in 25 cents higher than what the Bethesda, Md.-based company posted in 2014.

Profit for the October-December period rose 3.2 percent year-over-year to $933 million and showed a nominal decline on a full year basis to $3.6 billion from the $3.61 billion reported in 2014.

Revenue in the fourth quarter was reported as $12.92 billion, or 3.11 percent up from the same period last year, and full year sales hit $46.13 billion to show a 1.16-percent increase from 2014.

Wall Street analysts expected Lockheed to post $12.36 billion in fourth quarter revenue and nearly $45.53 billion in 2015 sales.

The world’s largest aerospace and defense contractor also issued fiscal year 2016 guidance of earnings in the $11.45-to-$11.75 range on a per share basis versus analyst expectations of $12.23 with revenue of between $49.5 billion and $51.5 billion against Wall Street’s forecast of $49.52 billion.

Lockheed detailed its FY 2015 and fourth quarter results in a separate announcement from the news that it would divest its information technology and government services businesses to Leidos Holdings (NYSE: LDOS) in a $5 billion, tax-free transaction called a Reverse Morris Trust.

Lockheed Chief Financial Officer Bruce Tanner told investors in a subsequent call to discuss the deal and 2015 earnings that the company would have had to sell the services segment for at least $7 billion in order to record a $5 billion profit on the sale due to taxes.

Proceeds from the deal’s $1.8 billion, one-time payment to Lockheed will go toward debt retirement, dividend payments and share repurchases.

Lockheed included results from its information systems and global solutions segment and the now-acquired Sikorsky Aircraft in fiscal 2016 guidance.

Backlog as of Dec. 31 was stated as a record $99.6 billion, which includes $15.6 billion contributed by Sikorsky.

The information systems and global solutions segment that houses much of Lockheed’s IT and services work posted $5.6 billion in 2015 sales, relatively flat from 2014 figures, and $1.4 billion in revenue for the 2015 fourth quarter to show a 6.04 percent year-over-year decline.

Aeronautics segment revenue in the fourth quarter increased 5.54 percent from the same period in 2014 and 4.35 percent on a year-to-year basis, while mission systems and training showed jumps of 13.47 percent and 4.12 percent over those respective time spans, and space systems recorded declines of 8.1 percent and 1.08 percent for the three- and 12-month periods.

Lockheed repurchased 15.2 million shares for $3.1 billion in 2015 with 305 million outstanding on the market as of last year’s end.

The company aims to have less than 300 million shares outstanding by 2017 through its repurchase initiatives.

Shares in Lockheed declined 2.35 percent since January began and have risen 6.52 percent in 52 weeks with the company’s market capitalization at $64.82 billion as of market close Monday.

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