Lockheed raises target after solid results

Lockheed raises its profit forecast on quarterly results with an eye on the international market.

A Lockheed Martin F-16 fighter jet on the Farnborough International Airshow in the UK. Lockheed is among those bidding heavily in the Gulf. Chris Ratcliffe / Bloomberg News

Lockheed Martin has raised its annual earnings forecast on the back of strong quarterly results, as the company seeks to boost international sales.

Net income at the world's largest defence contractor rose by 10 per cent to US$859 million in the second quarter, while revenue declined by 4 per cent to $11.4 billion.

"Overall, we had strong operational performance and programme execution across all business areas this quarter, enabling us to increase 2013 financial guidance for operating profit, earnings per share, and cash from operations," said Marillyn Hewson, Lockheed's chief executive and president.

The US company now expects its full year earnings per share to range from $9.20 to $9.50 a share, up from the previous projection of $8.80 to $9.10. Lockheed this month announced the creation of a unit dedicated to overseas sales to counter Pentagon spending cuts.

US defence contractors are increasingly looking abroad to offset savings at home, with Asia and the Middle East particular targets of their sales drive.

Lockheed is among those bidding heavily in the Arabian Gulf, and its efforts were rewarded when the UAE government made it the preferred bidder for a new air defence system earlier this year. The company beat competition from France's ThalesRaytheonSystems to become the likely contractor for Diamond Shield, which will create a centralised command and control centre capable of running all aspects of a country's air defence.

It could also form the basis of an integrated missile shield for the entire Arabian Gulf region, according to Lockheed Martin.

"A country needs its own air defence network," Cliff Spier, Lockheed's vice president for information systems and global solutions told The National in February. "But Diamond Shield allows you to share your defence coverage with your neighbours and allies. What you are looking at, they can look at. It enables old systems and new systems to be integrated. Diamond Shield is an enabler for GCC integration."

The company missed out on a contract to supply the UAE military with two surveillance satellites, as a European consortium clinched the €700m (Dh3.38bn) deal this week.

The sale of 20 Lockheed Martin F16 fighter bombers to Egypt will continue in spite of the crisis in the country.

Quarterly profits from the sale of missiles, training and logistics rose, Lockheed said in its earnings statement, as did profits from the sale of the company's state-of-the- art F35 fighter.