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Lockheed Martin Corporation Beats Earnings Estimates

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Lockheed Martin Corporation (NYSE:LMT) released the results from its second fiscal quarter, posting earnings of $2.76 per share on $11.31 billion in revenue, a 1% increase. Analysts had been expecting the defense contractor to report $2.66 per share in earnings on $11.14 billion in revenue. In the same quarter a year ago, the company posted $11.4 billion in revenue and $2.64 per share in earnings.

Lockheed Martin’s pensions

During the second quarter, Lockheed Martin included $85 million in FAS / CAS pension income, which had a positive impact of 16 cents per share on net earnings. That’s compared to a reduction of 23 cents per share from the same item in the second quarter of last year.

“Based on our solid program execution and operational performance through the first half of the year, we increased our 2014 financial guidance for profit, earnings, and cash flow,” said Lockheed Martin Chairman, President and CEO Marillyn Hewson in a statement. “Our sound strategy, diverse portfolio and focus on affordability are yielding results and delivering value to our customers and shareholders.”

During the second quarter, Lockheed Martin contributed $515 million to its pension trust and paid $421 million in cash dividends. The defense contractor bought back 800,000 shares for a total of $124 million during the second quarter but ceased discretionary share repurchases while it considered amending some parts of its pension plans The company also made $150 million in capital expenditures.

Breaking down Lockheed Martin’s earnings

Lockheed Martin reported that net sales for its Aeronautics division rose 13% year over year due to higher net sales for F-35 production contracts. Operating profit for the segment rose 11% year over year due to the F-22 program, C-130 program and F-35 program.

In Information Systems and Global Solutions, the company reported an 8% decline in net sales due to the wind-down of some programs and volume declines in other programs. In Missiles and Fire Control, Lockheed Martin saw a 7% decline in net sales due to a decline in sales of technical services and fewer deliveries of missiles. Higher sales of fire control programs partially offset those declines.

In Mission Systems and Training, Lockheed Martin reported comparable sales year over year, and in Space Systems, the company posted an 11% decline in net sales due to lower sales of government satellites.

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