Shares of defense contractorLockheed Martin (
) gained altitude Tuesday after the company reported
better-than-expected quarterly earnings and revenue and gave a
generally upbeat view of what's going on inside the company.
The company reported earnings of $2.76 a share, a 5% increase
from a year ago, vs. estimates of $2.66. Revenue came in at
$11.31 billion, a 1% decline, yet above estimates of $11.14
That sent the stock up 4.89 to close at 167.87, landing it
just a hair's breadth from an all-time high. Lockheed is a slow
but steady grower, depending on the vicissitudes of defense
CFO Bruce Tanner said on the conference call that
investigators had not firmly established the root cause of a fire
that grounded an F-35 jet fighter, "but we're getting close."
The F-35 was grounded on Pentagon orders after an engine fire
in June at a Florida air base. The action meant the plane missed
two highly publicized air shows in the U.K. He said Pentagon
officials have reassured foreign buyers the problem is not
related to the engine design. The plane is scheduled to go into
combat service next July.
Growth has slowed down from heavy defense spending of the Bush
administration, but it's grown earnings the past four years from
1% to 5% to 5% to 18%. Analysts are forecasting 10% growth this
year and 6% the next. The five-year Earnings Stability Factor is
4 on a 0 to 99 scale, where low numbers correspond with stable
Revenue has grown for 11 straight years, but fell by 4% in
Lockheed has been growing dividends nicely. From a quarterly
payout of 11 cents a share in 2000, it's now $1.33, which works
out to an annual yield of 3.3%. The next quarterly payment is
Sept. 26 to shareholders of record Sept. 2.