Lockheed reports solid first quarter

Published 4:00 am Thursday, April 23, 2015

While Lockheed Martin reported a solid first quarter of the fiscal year, officials are seeing declining demand for the products in the missile and fire control programs, including those produced in Pike County.

The company reported a first-quarter net sales of $10.1 billion and net earnings of $878 million or $2.74 per share.

Katherine Trinidad, a spokesperson for Lockheed Martin, said the key message of the first quarter report was that the company had a solid first quarter for the fiscal year. “We had a strong year-to-date financial performance across multiple business areas and that enables us to increase our 2015 outlook in operation profit and earnings per share,” Trinidad said. “In addition, we were able to reaffirm our earlier outlook for full year order, sales and cash from operations.”

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But the company reported that the Missile and Fire Control sector’s net sales had decreased approximately $364 million dollars compared to the same time period in 2014, for a 19 percent decline in year-over-year sales largely attributed to a lower net sales of $160 million for the tactical missile programs.

And, there was approximately an $85 million decrease for fire control programs also due to decreased deliveries from the company.

“The net sales for Quarter 1 2015 were down 19 percent compared to 2014, and that’s attributed to fewer deliveries of the missiles they produce,” Trinidad said. “About $115 million of that was also due to decreased deliveries to the Patriot Advanced Capability-3 missile.”

“The decrease in deliveries in several of our MFC programs was expected and will be balanced by increased delivery levels later in the year,” Trinidad said concerning the decreased amount of deliveries seen in the MFC sector furnished by the Pike County facility.

The MFC’s operating profit for the first quarter of 2015 also decreased by $66 million, or 18 percent, compared to the same time period in 2014. The decrease was attributable to lower operating profit of approximately $50 million for tactical missile programs due to fewer deliveries and lower risk retirements and about $25 million for fire control programs due to lower risk retirements and fewer deliveries.

Trinidad reported that sales were lower by approximately 5 percent for the company, but it was not something the company did not expect.

“This was something we expected,” Trinidad said. “The lower sales level were driven by MCF and aeronautics area. We remain on track to achieve the sales outlook that we provided at the beginning of the year.”

And, Site Operations Manager for the Pike County facility Vic Debruyne echoed Trinidad’s statements saying the location had been fully prepared for the decline in deliveries during the first fiscal quarter of the year.

“The decrease in deliveries in some of our programs was expected, but will be balanced by increased deliveries later this year,” Debruyne said. “Our Pike County employees are fully engaged in supporting our production lines. We began expanding our THAAD and Long Range Strike System production in early 2014 to accommodate new orders. We have hired about 40 employees and are continuing to invest in the facility.”

Despite the company reporting lower numbers than the 2014 Quarter 1, Marillyn Hewson, Lockheed Martin Chairman, President and Chief Executive Officer, said the company still continued to deliver solid performance for customers and stockholders.

“Our team continues to deliver solid performance for our customers and strong results for our shareholders,” Hewson said. “We remain focused on successfully competing in the global marketplace and delivering industry-leading affordable products and technologies to our customers.”