Lockheed Martin Corp. (LMT), the world’s largest defense contractor, said it expects 2013 sales to fall at the low end of its January forecast because of automatic U.S. budget cuts that began March 1.
Still, first-quarter profit beat analysts’ estimates. Net income from continuing operations rose 14 percent to $761 million, or $2.33 a share, from $668 million, or $2.03 a share, a year earlier, Lockheed said today in a statement. The average estimate of 20 analysts surveyed by Bloomberg was $2.04 a share. Sales declined 2 percent to $11.1 billion.
The Bethesda, Maryland-based company said the automatic reductions known as sequestration may trim full-year sales by about $825 million, holding 2013 revenue to the low end of the range from $44.5 billion to $46 billion forecast in January. It maintained its forecast for a profit of $8.80 to $9.10 a share.
“While the impact of sequestration on our business has been limited to date, we continue to work closely with our customers to better understand the future impact sequestration may have on our programs,” Marillyn Hewson, Lockheed’s chief executive officer, said in the statement.
The spending reductions were created by President Barack Obama and congressional Republicans as a penalty for failing to agree on a deficit-reduction strategy. They will strip $1.2 trillion from national security and domestic programs over nine years unless an alternative is enacted.
Lockheed’s reduction in first-quarter sales stemmed mostly from fewer deliveries of F-16 jets and C-130 transport planes, according to the statement.
Revenue from the F-35 fighter jet, the Pentagon’s most expensive weapons system, was “up slightly” compared with the same quarter a year ago, according to the statement. The F-35 accounted for 14 percent of Lockheed’s sales last year, according to a Securities and Exchange Commission filing.
Lockheed fell less than 1 percent to $95.85 in New York trading yesterday and has risen 3.9 percent this year.
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