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Technology Stocks : LOCKHEED MARTIN, (LMT) -- Ignore unavailable to you. Want to Upgrade?

To: carlos jeanpierre who wrote (538)	4/21/1999 9:02:00 AM
From: Wally Mastroly	Respond to of 732

LMT earnings comments - from the Wall street Journal: LOCKHEED MARTIN REPORTS EARNINGS: Lockheed Martin Corp. reported a first-quarter loss of $87 million, or 23 cents a share, because of a charge from an accounting change and continuing woes and continuing woes in its miltary-aircraft and space-related lines. Excluding unusual items, which included a one-time gain from a stock sale, earnings declined 28% to 51 cents a share, or $194 million, in line with expectations. The aerospace, defense and information company had said earlier this year that its 1999 first-quarter earnings would be lower than in the year-earlier quarter because of program snarls that erupted last year, and other costs. Lockheed Martin also disclosed to analysts yesterday that its earnings projections of $3.36 a share for all of 1999 could be affected by a "10% swing" up or down, depending on how smoothly significant questions relating to military-aircraft and space-launch programs are resolved. Company officials said the impact on 1999 earnings will be clearer by the end of the second quarter. Sales for the first quarter were virtually flat, at $6.18 billion. Shares in Lockheed Martin, based in Bethesda, Md., fell 75 cents, to $39. The charge from the accounting change, which no longer allows the company to amortize costs for a new line of space-launch rockets, reduced earnings by $355 million, or 93 cents a diluted share. The company also reported a one-time gain of $74 million from the sale of stock in L-3 Communications Holdings Inc. Among other factors lowering earnings was a $15 million reduction in payments from the Pentagon relating to a recent theater missile-defense test that came up short. Another factor was continuing costs for starting up a new global-telecommunications subsidiary. Byron Callan, a Merrill Lynch analyst, said Lockheed Martin is enduring a period in which "there are an unusual number of unresolved issues" in its financial future. Lockheed Chairman and Chief Executive Vance Coffman said that while the results were "on plan, they were not as good as we'd like them to be" and the company remains focused on resolving issues that have created "uncertainty for our customers and shareholders." Mr. Coffman cautioned that meeting analysts' earnings expectations "depends on the timing" of aircraft deliveries and launches, as well as decisions about shedding certain noncore businesses and operating performance. Analysts seemed surprised at some parts of the company's review yesterday, including the continuing cost problems on production of the C-130J military transport during the first quarter, which one Lockheed official termed as "pretty substantial." Executives told analysts the questions still dangling over 1999 performance include C-130J cost controls; whether government quotas will restrain use of rockets in a joint launch venture with Russia; the need for improved productivity in commercial-satellite production; the outlook for foreign sales of the F-16 fighter aircraft, including a major sales to the United Arab Emirates; and whether more penalties will be incurred because of shortcomings in a theater-missile-defense program.