PARIS — Lockheed Martin on Oct. 27 reported flat sales but increased operating profit at its Space Systems division for the first nine months of 2011 despite lower earnings from its United Launch Alliance joint venture with Boeing.
The company said sales managed a 1 percent increase, to $6.02 billion for the nine months ending Sept. 25, despite the decline in revenue from its work on the external fuel tank of the now-retired U.S. space shuttle and on NASA’s Orion astronaut crew transport vehicle.
The shuttle was retired in July. In an Oct. 27 filing with the U.S. Securities and Exchange Commission, Lockheed Martin said the loss of the external tank work reduced Space Systems revenue by $85 million when compared with the same period in 2010. For the Orion program, whose development has seen ups and downs in revenue terms, the company said revenue for the first nine months of 2011 was $150 million lower than a year earlier.
Operating profit for the Space Systems division was up $42 million, or 6 percent, for the nine months ending Sept. 25 compared with a year ago. The operating profit margin was 12.1 percent, compared with 11.6 percent last year.
Bethesda, Md.-based Lockheed Martin owns 50 percent of Denver-based United Launch Alliance (ULA) and reports ULA performance in the form of equity earnings. For the first nine months of 2011, Lockheed Martin’s share of ULA earnings was down $30 million from 2010, the company said in the SEC filing.
Lockheed Martin is prime contractor for several U.S. Defense Department satellite programs, including the GPS 3 next-generation navigation system, the Advanced Extremely High Frequency telecommunications satellites, the Space Based Infrared System missile warning constellation and the U.S. Navy’s Mobile User Objective System for communications, whose first satellite is scheduled for launch in early 2012.
Lockheed Martin Chief Financial Officer Bruce L. Tanner said during an Oct. 26 conference call with investors that the company’s multiyear contracts for satellite systems are already in backlog and as such are presumed to be protected from the debate about the U.S. Defense Department’s budget for the next year or two.
Lockheed Martin expects its Space Systems business to report lower sales for full-year 2011 compared with 2010 as the external tank loss will overcome increases in the company’s satellite business. Space Systems revenue in 2012 is likely to be flat relative to 2011, the company said.
