Lockheed Martin (NYSE:LMT) reported net earning of $3 billion
for 2007, up 20% from 2006. In the fourth quarter the company
earned $799 million, 9.6% over the fourth quarter of 2006. Lockheed
Martin's revenues totaled $41.9 billion for 2007, representing
a 6% increase over 2006. The largest segment was aeronautics,
contributing $12.3 billion to the annual revenues (flat growth,
12.0% operating margin) Electronic Systems contributed $11.14
billion to the sales, (up 6%) and 12.6% operating margin.
Sales of Lockheed Martin's Aeronautics business declined by
11% in the fourth quarter, but overall increased by 1% for the
entire year. Lower production volume of F-16 aircraft, and F-35s
as well as C-130 was attributed for the Q4 drop. Throughout
the year, lower production activities were compensated by an
increase in sustainment services activities, dictated by continued
higher operational tempo of U.S. Air Force aircraft. Overall,
the volume increases on the F-22 program was sufficient to offset
the decline on the F-16 and C-130 programs. profitability of
this segment increased in 2007, primarily on combat aircraft,
but decreased in C-130 support.
The Electronic Systems segment increased by 6% during 2007,
particularly in fire control systems and air defense programs
while sales of tactical missiles decreased, compared to 2006.
Undersea and radar systems activities generated higher sales
while surface systems dropped. Platform integration were also
higher in 2007.
General Dynamics (NYSE:GD) earned $2.1 Billion in 2007, up
23% from 2006. The company reported total revenues for the whole
year was $27.2 Billion, up 12% from 2006. Fourth quarter earnings
and revenues were roughly proportional to the full year's results.
By year's end the company's backlog stands at $46.8 Billion.
"Given our strong performance in 2007, the record backlog
and strong support for our programs, we expect 2008 earnings
to be in the range of $5.55 to $5.65 per share, fully diluted,"
said General Dynamics Chairman and Chief Executive Officer Nicholas
GD's Combat Systems segment represented the biggest growth
in earnings and profit in 2007, up 30% from 2006, sustaining
about 11% operating margin. Aerospace segment trailed in second
place, with 17% growth but higher operating margin (16.8%).
Northrop Grumman's earnings for 2007 were $1.8 billion up from
$1.6 billion in 2006 representing 12.5% growth in the 2006-2007
period. For 2007, sales increased 6% to $32 billion from $30.1
billion in 2006. The company's backlog increased by $3 billion
to $64 billion positioning Northrop Grumman in a good opening
position for 2008.
All divisions demonstrated healthy growth. Information &
Services segment increased sales by 11% through 2007 but profitability
dropped compared to 2006, with operating margin dropping by
0.6% to 8.1% of sales, reflecting higher costs. Mission Systems
operations increased 8% in 2007 while maintaining 2006 operating
margin levels (9.5%). This growth reflected higher volume for
C4 and missile defense programs, and the acquisition of the
Essex Corporation. The report indicated that the operating margin
in 2007 was attributed mainly to higher volumes.
Information Technology sales rose $524 million (13%) largely
due to higher sales for commercial, defense and intelligence
programs. The operating margin of this segment also declined
from 8.3% in 2006 to 6.8%, ($13 million), primarily due to a
business mix that included higher volume of lower-margin deals.
Aerospace sales for 2007 declined $223 million (3%) from 2006,
due lower sales of the integrated systems operation, partly
offset by higher sales of space technology. Declining sales
were attributed to lower volumes related to programs transitioning
to production including E-2D and EA-18G, and the F-35 program
(which suffered delays since thMay 2007). Reduction was also
experienced in the E-10A and related MP-RTIP systems. However,
increased support for B-2, F/A-18 and the Global hawk helped
balancing the picture.
revenues from black programs, sales of land forces equipment,
electro-optical targeting pods and infrared countermeasures
and ISR systems contributed to an increased of 6% in sales of
the Electronics segment in 2007. Operating margin increased
$32 million, and as a percent of sale was 11.8%, up 0.3% from
Sales of Northrop Grumman's shipbuilding operations rose $467
million or 9% from 2006, the increase reflects new orders for
landing assault ships (LPD, LHD and LHA) aircraft carrier construction
and modernization and submarines programs. The profitability
of the shipbuilding operations increased substantially from
2006, increasing operating margin to $145 million (37%) or 9.3%
of sales (compared to 7.4% in 2006). Although this achievement
reflects substantial performance improvements, it also accounts
for insurance recovery related to Hurricane Katrina and pretax
gains resulting from reorganization activities.
United Technologies Corp. (NYSE:UTX) reported a powerful close
top 2007, and its expectations for 2008 are also solid. Engine
maker Pratt & Whitney increased revenues 9% reporting $12.129
billion in 2007. Sikorsky reported 47% growth in revenue, from
$3.23 billion to $4.78 billion in 2007. However, both divisions
reported lower consolidated profit margins in 2007 – PW's
consolidated profits were 22% below 2006's, mostly attributed
to the fourth quarter and Sikorsky reports a $3 million loss
for 2007. the reports didn't provide explanations for this data.
In the 4th quarter of 2007 Sikorsky signed a five-year, $7.4
billion contract with the Pentagon, for the supply of 537 H-60
type helicopters for U.S. military services. The contract has
options for 263 more helicopters, which could add $4.2 billion
to Sikorsky's cashflow.
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