Lockheed Martin Profit Falls 5.9%

Lockheed Martin Corp. reported a 5.9% decline in first-quarter profit as lower government military spending dented its revenue.

The defense contractor reported earnings of $878 million, or $2.74 a share, down from $933 million, or $2.87 a share, a year earlier. Revenue fell 5.6% to $10.11 billion.

Analysts polled by Thomson Reuters were looking for a profit of $2.50 a share on $10.3 billion in revenue.

For the year, Lockheed raised its earnings guidance from what some analysts considered conservative projections issued in January. The company now expects to book $10.85 to $11.15 in per-share earnings, versus an earlier range of $10.80 to $11.10. Lockheed continues to forecast $43.5 billion to $45 billion in revenue.

Analysts have projected full-year profit of $11.14 a share and $44.6 billion in revenue.

Lockheed's organic sales have fallen over the past three years and are expected to decline again this year as the impact of Pentagon cuts continues. Like smaller rival Raytheon Co., Lockheed has projected a return to growth in 2016.

In the first quarter, sales in Lockheed's aeronautics segment, its largest, dropped 7.4% to $3.1 billion. The company pointed to fewer aircraft deliveries for the C-130 program.

Lockheed has benefited from its positions on programs such as the F-35 that have been relatively protected from budget cuts, and is also bidding on two of the largest upcoming contract awards this year. The planned new Air Force bomber program is expected to cost around $80 billion, while a replacement for the Army's Humvee trucks is forecast to cost more than $30 billion.

Shares, up over 20% through Monday's close, were inactive premarket.

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