BETHESDA, Md. - Lockheed Martin reported third quarter 2014 net sales of $11.1 billion, down two percent compared to $11.3 billion in the third quarter of 2013. Net earnings from continuing operations in the third quarter of 2014 were $888 million, compared to $842 million, in the year ago period.
"Although we continue to face global economic challenges, our program and operational performance this quarter resulted in increased earnings per share and strong cash generation," said Chairman, President and CEO Marillyn Hewson. "As we look ahead to 2015, we will remain focused on delivering for our customers, returning value to our shareholders, advancing our technologies and investing in our people."
Backlog was $76.5 billion at the end of the quarter compared to $82.6 billion at year-end 2013.
INDUSTRY SEGMENTS
Aeronautics
Aeronautics' net sales for the third quarter of 2014 decreased to $3.54 billion, or 2 percent, compared to $3.63 billion in the same period in 2013. The decrease was primarily attributable to lower net sales of approximately $225 million for the C-130 program due to fewer deliveries (five aircraft delivered in the third quarter of 2014 compared to eight delivered in the same period of 2013) and lower sustainment activities; about $80 million for the F-35 development contract due to lower volume; and approximately $30 million for other sustainment activities due to lower volume. The decreases were partially offset by higher net sales of approximately $130 million for F-35 production contracts due to increased volume, partially offset by lower risk retirements; and approximately $115 million for various other programs due to increased volume.
Aeronautics' operating profit for the third quarter of 2014 decreased to $362 million, or 12 percent, compared to $412 million in the same period in 2013. The decrease was primarily attributable to lower operating profit of approximately $50 million for the C-130 program due to lower risk retirements and fewer aircraft deliveries; about $40 million for other sustainment activities due to lower risk retirements and lower volume; and approximately $30 million due to reserves recorded for contractual matters. The decreases were partially offset by higher operating profit of about $35 million for the C-5 program due to the absence in the third quarter of 2014 of the downward revision in the profit booking rate that occurred in the third quarter of 2013; and approximately $40 million for various other programs and equity earnings from a joint venture. Operating profit was comparable for the F-35 development contract. Operating profit was comparable for F-35 production contracts due to increased volume offset by lower risk retirements. Adjustments not related to volume, including net profit booking rate adjustments and other matters, were approximately $65 million lower for the third quarter of 2014 compared to the same period in 2013.
Information Systems & Global Solutions
IS&GS' net sales for the third quarter of 2014 decreased 5 percent to $1.95 billion compared to $2.06 billion in the same period in 2013. The decrease was primarily attributable to lower net sales of approximately $150 million due to the wind-down or completion of certain programs (primarily command and control programs); and about $60 million due to a decline in volume for various programs, which reflects lower funding levels and programs impacted by in-theater force reductions. The decreases were partially offset by higher net sales of about $100 million due to the start-up of new programs, growth in recently awarded programs and integration of recently acquired companies.
IS&GS' operating profit for the third quarter of 2014 decreased 6 percent to $175 million compared to $187 million the same period in 2013. The decrease was primarily attributable to the activities mentioned above for sales. Adjustments not related to volume, including net profit booking rate adjustments, for the third quarter of 2014 were comparable to the same period in 2013.
Missiles and Fire Control
MFC's net sales for the third quarter of 2014 decreased 5 percent to $1.91 billion, compared to $2.0 billion in the same period in 2013. The decrease was primarily attributable to lower net sales of approximately $95 million for various technical services programs due to lower volume reflecting market pressures; and about $70 million for tactical missile programs due to fewer missile and launcher deliveries (including the Guided Multiple Launch Rocket System). The decreases were partially offset by higher net sales of about $60 million for various programs due to increased volume. Net sales for air and missile defense programs were comparable as increased volume for Terminal High-Altitude Area Defense was offset by fewer deliveries for the Patriot Advanced Capability-3 program.
MFC's operating profit for the third quarter of 2014 decreased 6 percent to $335 million, compared to $356 million in the same period in 2013. The decrease was primarily attributable to lower operating profit of approximately $20 million for various technical services programs due to lower volume and reserves recorded on certain programs. Adjustments not related to volume, including net profit booking rate adjustments and other matters, were approximately $15 million lower for the third quarter of 2014 compared to the same period in 2013.
Mission Systems and Training
MST's net sales for the third quarter of 2014 decreased 1 percent to $1.68 billion compared to $1.69 billion in the same period in 2013. The decrease was primarily attributable to lower net sales of approximately $30 million for ship and aviation systems programs due to lower volume (primarily the Merlin Capability Sustainment Program). The decrease was partially offset by higher net sales of approximately $25 million for undersea systems programs due to higher volume.
MST's operating profit for the third quarter of 2014 decreased 11 percent to $193 million compared to $216 million in the same period in 2013. The decrease was primarily attributable to lower operating profit of approximately $35 million for integrated warfare systems and sensor programs due to lower risk retirements (primarily radar surveillance programs). Adjustments not related to volume, including net profit booking rate adjustments, were approximately $20 million lower for the third quarter of 2014 compared to the same period in 2013.
Space Systems
Space Systems' net sales for the third quarter of 2014 increased 4 percent to $2.03 billion compared to $1.96 billion in the same period in 2013. The increase was primarily attributable to higher net sales of approximately $145 million for commercial space transportation programs due to launch-related activities; and about $70 million for the Orion program due to increased volume. The increases were partially offset by lower net sales of approximately $140 million for government satellite programs due to lower volume (primarily the Advanced Extremely High Frequency (AEHF) program).
Space Systems' operating profit for the third quarter of 2014 was $281 million down slightly from $284 million in the same period in 2013. Operating profit decreased by approximately $30 million for government satellite programs due to lower volume and risk retirements (primarily AEHF). Operating profit increased by approximately $20 million due to higher equity earnings for joint ventures. Adjustments not related to volume, including net profit booking rate adjustments, were approximately $15 million lower for the third quarter of 2014 compared to the same period in 2013.
Total equity earnings (primarily ULA) recognized by Space Systems represented approximately $90 million, or 32 percent, of this business segment's operating profit for the third quarter of 2014, compared to approximately $70 million, or 25 percent, for the third quarter of 2013.
You have 0 item(s) in your cart