US defence contractor Lockheed Martin - a major source of work for aerospace firms in the West Midlands - yesterday said its second-quarter earnings jumped 26 per cent on higher information technology and satellite sales, beating Wall Street's expectations and prompting the company to boost its outlook for the year.
Lockheed, the nation's largest military supplier, reported earnings of $580 million (£316.9 million), up from $461 million (£251.9 million) in the second quarter of 2005. Sales were $10 billion (£5.46 billion), up seven per cent from $9.3 billion (£5.08 billion) during the year-ago quarter.
"Our results reflect excellent operational and financial performance," said Lockheed Chief Executive Bob Stevens.
Known for its fighter jets and missiles, Lockheed has expanded the breadth of its government contracts to limit reliance on sometimes unpredictable spending on big military projects. For instance, the company now has contracts in homeland security, including one tied to the New York City subway system.
Sales in Lockheed's system and information technology unit were nearly double the aircraft division's second quarter results. The systems and IT unit posted sales of $5 billion, a five per cent increase over 2005 second quarter results. The delivery of two commercial satellites in the quarter pushed up sales in the space division by 29 per cent to $2.1 billion (£1.14 billion). The company did not deliver any satellites in the same quarter last year.
Lockheed's aeronautics division continued to lag behind other units, posting a two per cent dip to $2.8 billion (£1.53 billion) on lower revenue from fighter jets and transport planes. Lockheed is in the process of winding down its best-selling but aging F-16 fighter while newer programs like the F-35 Joint Strike Fighter and F-22 Raptor have not reached full production.
Lockheed chief financial officer Christopher Kubasik said the lower results were expected.