Lockheed Martin
Lockheed Martin F-35A test aircraft AF-6 and AF-7 fly in formation on a test mission over Edwards Air Force Base, Calif.

Manufacturers Flying High with Strong Third-Quarter Results

Oct. 22, 2013
Despite what seems at times as Washington's best efforts to derail the economy, four major manufacturing firms reported strong results in their latest fiscal quarters.

Four household names in U.S. manufacturing reported improved results for the third quarter of 2013 as they coped with a variety of market challenges in their respective sectors.

Lockheed Martin (IW 500/29), the nation’s largest defense contractor, saw sales decrease 4% in the third quarter to $11.3 billion, but net earnings increased 16% to $842 million. The company obtained $15 billion in new orders and increased its backlog to $78.7 billion. Lockheed Martin increased its earnings per share outlook for the year to $9.40 to $9.70 from $9.20 to $9.50 but forecast that net sales for 2014 would decline slightly. The company’s aircraft business saw a $66 million decline in sales as it delivered two F-16 fighter jets compared to six in the comparable quarter last year, but operating profit was roughly equal. Lockheed Martin said its backlog of orders and expanded international sales would help mitigate defense cuts in the U.S.

CEO Marilyn Hewson: “[W]e also ask that [Congress and the administration] address and revise the across-the-board budget reduction policy required under the current sequestration law. This non-strategic allocation of budget reductions is not good for our nation or our national security strategy.”

DuPont (IW 500/36) saw third quarter sales increase 5% to $7.7 billion as its performance materials, electronics and communications, and safety and protection divisions all reported stronger sales and earnings. Its agriculture sales increased 15%, reflecting strong growth in Latin America that helped narrow the unit’s seasonal loss by $8 million to $62 million. Electronics and communications benefited from increased sales in photovoltaics while the safety and protection business increased earnings by $24 million on demand for U.S. ballistics military products, protective garments and construction products. The company’s performance chemicals group reported earnings of $254 million, a drop of $159 million, due to price declines for titanium dioxide, refrigerants and fluoropolymers.

CEO Ellen Kullman: “While we expect overall sequential growth in industrial market demand will remain subdued, fourth quarter operating earnings will be up substantially from last year.”

Whirlpool (IW 500/66) nearly tripled its earnings for the quarter from a year ago, posting net earnings of $196 million, as sales rose 5% to $4.7 billion. Whirlpool raised its full-year earnings forecast to $10.65 a share from $10.45. The company saw its operating profit increase from $227 million to $289 million in North America. Its European, Middle East and Africa business had a sales increase of 5% to $778 million, resulting in break-even earnings for the quarter compared to an operating loss of $36 million in the third quarter of 2012. Sales were down modestly in Latin America, largely the result of reduced global compressor sales, and in Asia.

CEO Jeff Fettig: “Our robust pipeline of new product innovations for consumers around the globe creates significant opportunities for us going forward.”

Harley-Davidson (IW 500/183) rode the strengthening economy, new products and increased production efficiencies to improved results in the third quarter. It had third-quarter net income of $162.7 million on revenue of $1.34 billion, compared to net income of $134 million on revenue of $1.25 billion in the same 2012 period. Dealer sales of motorcycles increased 20.1% in the U.S. to 48,529 and overall global sales were up 15.5%, to 70,517. Harley-Davidson continues to expect to ship 259,000 to 264,000 motorcycles to dealers and distributors worldwide in 2013, and to achieve gross margin of 35.25% to 36.25%.

CEO Keith Wandell: "Rider response to the 2014 motorcycles we introduced August 18 was extremely positive. In fact, initial retail sales of the new Project Rushmore motorcycles sparked the largest year-over-year new model year sales increase in two decades. We also capped our year-long 110thanniversary celebration in late August when throngs of riders joined us in Milwaukee from around the world for a huge three-day party like only Harley-Davidson can throw."

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