WASHINGTON — Defense contractor Lockheed Martin said Tuesday that its second-quarter net income rose 12 percent thanks to stronger military hardware sales and a gain from plans to sell off a business unit.
The nation's biggest supplier of military equipment earned $825 million, or $2.22 per share, up from $734 million, or $1.88 per share in the same quarter last year.
Revenue rose 4 percent to $11.44 billion from $11.07 billion. Lockheed said sales were up in all four of its divisions that make fighter jets, missiles, satellites and defense electronics.
Even excluding tax gains of $96 million from the unit that Lockheed is trying to sell, the company's earnings of $727 million, or $1.96 per share, topped Wall Street expectations.
Analysts surveyed by Thomson Reuters were looking for $1.78 per share and revenue of $11.48 billion.
The company also raised its per share outlook by 15 cents mostly due to a lower expected share count, but trimmed its revenue forecast by $750 million because of upcoming divestment. Lockheed bought back about $782 million of its stock during in the second quarter, using some of the $1.2 billion in cash it generated during that time.
Lockheed now foresees between $7.15 to $7.35 earnings per share and $45.5 billion to $46.5 billion of revenue in 2010. Analysts expect $7.29 per share on $46.93 billion of revenue.
Lockheed and the rest of the defense industry are digesting big changes as the Pentagon, their biggest customer, tightens budgets and toughens rules for contractors to cut costs.
As part of that shift, Lockheed said in June that it planned to sell two units that provide a wide range of services for intelligence and other government agencies; Enterprise Integration Group and the Pacific Architects and Engineers business. The company said the changes are being driven by shifting customer demand and to avoid new rules over conflicts of interest for contractors.
Lockheed Martin Corp. is based in Bethesda, Md.