LMT Lockheed Martin Corp

By Doug Cameron and Lisa Beilfuss 

Lockheed Martin lifted its earnings forecast for the year as the company, continuing to reshape its business, benefited from sales of its F-35 jet fighter and its recently acquired Sikorsky helicopter unit.

The Maryland company, the world's largest military contractor by revenue, earlier this year announced plans to carve out its big government information-technology unit, a move to focus on more profitable work building military jets, helicopters and missiles.

Last month, Lockheed launched a voluntary layoff program in its aeronautics business, aiming to cut about 1,000 U.S. jobs, or about 0.8% of its total workforce.

Meanwhile, Lockheed has been working to fix glitches in its F-35 program, which is due to enter service with the U.S. Air Force by year-end. The company reported a 21% increase in aeronautics sales, to $3.80 billion, an increase it attributed to sales associated with the F-35 program in addition to increased deliveries of C-130 cargo planes. At the same time, revenue in its mission systems segment surged 52% thanks to helicopter maker Sikorsky Corp., a business Lockheed bought last year for $9 billion.

The jumps in aeronautics and mission-systems sales helped offset sales declines in the company's information-systems and space-systems segments.

Lockheed generates around 20% of its sales from exports and aims to boost the absolute total and share to around 25% over the next several years. Export prospects will be closely monitored as other large U.S. defense companies report their earnings this week.

Contractors including L-3 Communications Holdings Inc. and Oshkosh Corp. cautioned earlier this year that some prospective Middle East deals were taking longer to complete as countries scrutinized budgets falling into deficit because of low oil prices.

Chief Financial Officer Bruce Tanner said Lockheed expected to end the year with a backlog of $90 billion to $95 billion, down from almost $100 billion after the planned sale of its government IT unit to Leidos Inc.

Big orders expected this year include another sale of its F-35 combat jets to the U.S. and international customers. While a number of smaller opportunities are available next year, the Pentagon isn't expected to decide on two large contracts for missile defense and a new long-range missile until 2018, said Mr. Tanner.

Overall, for the first quarter, the company reported a profit of $794 million, or $2.58 a share, down from $878 million, or $2.74 a share, a year earlier. The company said charges stemming from job cuts reduced earnings by 21 cents a share.

Revenue climbed 16% to $11.70 billion. Analysts had projected $2.59 in adjusted earnings per share on $11.34 billion in revenue, according to Thomson Reuters.

For the full year, Lockheed expects to report $11.50 to $11.80 a share, up from earlier guidance of $11.45 to $11.75 a share. The company sees sales of $49.6 billion to $51.1 billion, slightly higher than its earlier prediction of $49.5 billion to $51 billion.

Shares of Lockheed Martin rose 2.3% to $231.42 in afternoon trading.

Write to Doug Cameron at doug.cameron@wsj.com and Lisa Beilfuss at lisa.beilfuss@wsj.com

(END) Dow Jones Newswires

April 26, 2016 14:09 ET (18:09 GMT)

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