By Doug Cameron
Lockheed Martin Corp. said Tuesday that it expects two-thirds of
its 2015 order haul to come in the second half of the year as it
pursues contracts to build a new Air Force bomber and an Army
truck, two programs that together are worth more than $100
billion.
The world's largest defense contractor by sales also pledged to
accelerate its share-buyback program in the second quarter as it
reported forecast-beating profits and raised its full-year
guidance.
Lockheed Martin Chief Executive Marillyn Hewson said she
remained confident of growing domestic and international sales, but
its two big Pentagon awards expected during the summer that are
focusing investor attention.
The company is teamed with Boeing Co.----which reports
Wednesday-- on a bid to build a new Long-Range Strike Bomber for
the Air Force, in competition with Northrop Grumman Corp. on a
program that is expected to cost more than $80 billion.
Lockheed also faces twin competition from Oshkosh Corp. and AM
General LLC to build trucks for the Army to replace the Humvee
model, a program that could cost around $30 billion.
"We're going to be significantly back-end loaded in our orders
for the year," Chief Financial Officer Bruce Tanner said on an
investor call, referencing the potential bomber and truck awards,
as well as export deals for missile-defense systems and F-35
fighter jets.
Lockheed ended the March quarter with a $76.9 billion backlog,
down 4.4% from Dec. 31, but it left its full-year order and sales
guidance unchanged.
The F-35 program remains Lockheed's largest growth driver, and
Ms. Hewson reiterated that half the orders for the jet were
expected to come from overseas customers over the next few years.
Analysts have been cautious on the outlook, flagging possible
changes following general elections in the U.K.--an existing
customer--and Canada, which has deferred a decision on buying new
fighter planes.
Lockheed's backlog and rising margins have helped the company
outperform most U.S. defense peers over the past two years,
alongside the sector's largest stock-buyback program. The company
spent more than $600 million on stock buybacks in the quarter, and
Mr. Tanner said this could rise to $1 billion in the current
quarter, though the company retained its guidance for at least $2
billion in repurchases for the year.
The company made no mention of potential acquisitions, having
spent around $900 million last year on a series of small deals in
space, cyber and commercial aerospace. A more stable Pentagon
budget outlook and low interest rates have spurred two big deals in
the sector this year. Raytheon Co. this week announced plans to
take control of cyberspecialist Websense Inc. for $1.7 billion, and
Harris Corp. is buying Exelis Inc. for around $4.5 billion.
Lockheed reported profits of $878 million in the March quarter
compared with $933 million a year earlier, with per-share earnings
dipping to $2.74 from $2.87 a share. Revenue fell 5.1% to $10.1
billion.
Profits beat the $2.50 consensus among analysts, driven by
higher margins and a better-than-expected performance from its
space unit.
For the year, Lockheed raised its earnings guidance range by 5
cents to $10.85 to $11.15 a share.
Lockheed shares were recently down 0.2% at $196.43.
Lisa Beilfuss contributed to this article.
Write to Doug Cameron at doug.cameron@wsj.com
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