WASHINGTON – Top U.S. weapons maker Lockheed Martin Corp reported lower-than-expected earnings on Thursday after charges linked to U.S. defense budget cuts and workforce reductions, but said it expected higher earnings this year.
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Lockheed, maker of F-35 fighter jets, satellites and warships, on Thursday said fourth quarter net earnings from continuing operations fell 14.2 percent to $488 million, or $1.50 per share, from $569 million, or $1.73 per share, a year earlier. Revenues dropped to $11.5 billion from $12.1 billion.
Analysts polled by Thomson Reuters I/B/E/S had forecast net quarterly earnings of $668.5 million or $2.02 per share on revenues of $11.34 billion.
Lockheed, the Pentagon's No. 1 supplier, said full-year earnings from continuing operations reached a record $3.0 billion, or $9.04 per share, up from $2.7 billion, or $8.36 per share, in 2012. Revenues dropped to $45.4 billion in 2013 from $47.2 billion in 2012.
Analysts had projected earnings of $3.11 billion or $9.49 per share on $45.1 billion in revenues.
The company said it expected slightly lower to flat revenues of $44 billion to $45.5 billion in 2014, but earnings per share were likely to rise to $10.25 to $10.55.
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Lockheed Chief Executive Marillyn Hewson said the company reached a record backlog of $82.6 billion in 2013 in addition to posting record earnings and profit margins. The release did not provide an overall profit margin for the company.
"Looking ahead to 2014, we will continue our focus on improving operational efficiency, reducing our cost structure, investing in innovations to address our customers' future challenges and returning value to our shareholders," she said in a statement.
Lockheed said its fourth-quarter earnings included a non-cash goodwill impairment charge of $195 million linked to U.S. defense spending cuts that reduced earnings by $176 million, and severance charges of $171 million that reduced earnings by $111 million. The two items combined reduced earnings per share by $0.88, the company said.
It said it did not expect similar goodwill charges for other reporting units in the near term.
Net earnings from continuing operations also included pension adjustments, although at a lower level than seen in the year-earlier period.
Sales were down across the company's five business areas in the fourth quarter, but three of the five - missiles and fire control, mission systems and training, and space systems - reported higher operating profit, Lockheed said.
(Reporting by Andrea Shalal-Esa Editing by Jeremy Laurence)