Lockheed Sees Strong Q2

Profits jump 12%

Lockheed Martin, the world's largest defense company, reported on July 27 a better-than-expected 12% jump in its second quarter profit and upgraded its annual earnings forecast.

Net income totaled $825 million on the back of a 3.3% increase in revenue to $11.44 billion as sales of missiles, fighter jets, satellites and defense electronics rose, the company said.

"We had strong second quarter financial results," said Lockheed CEO Bob Stevens.

He said the company decided to divest two units and realign others to "strengthen performance over the long term" amid the "new reality of escalating demands and increasing constraints on resources."

President Barack Obama's administration has called for deep cuts in massive overhead costs at the Pentagon as the country faces a fiscal crisis. Ending or scaling back some major weapons programs over the past year had saved billions of dollars, but it represented only a first step towards getting the vast defense budget under control, U.S. Defense Secretary Robert Gates said recently.

"Given America's difficult economic circumstances and parlous fiscal condition, military spending on things large and small can and should expect closer, harsher scrutiny," he said recently.

Despite alarm over the U.S. government's ballooning deficit, the military budget has been spared so far from belt-tightening efforts.

The 2011 defense budget comes to more than $700 billion, a roughly 2% increase.

Lockheed lowered its 2010 sales forecast to a range of $45.5-$46.5 billion from $46.25-$47.25 billion.

Copyright Agence France-Presse, 2010

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