Lockheed Further Lowers Its Profit Expectations

Lockheed Martin Corp. said Wednesday that its profit this year and next will be even lower than the reduced forecasts it made last month, as sales decline and production delays mount.

The second-biggest aerospace company said it will deliver just 20 to 25 C-130J cargo planes this year, less than the target of 30 that investors were told last month to expect. Lockheed’s satellite production has also been hampered because of faulty parts from a supplier. And the Air Force announced that it won’t accelerate purchases of the C-130J, as the company had hoped.

Lockheed shares fell $10.50 on Wednesday to close at $84.50 in heavy trading on the New York Stock Exchange.

“They’ve disappointed investors a few times in the last few months,” said Mike Holten, an analyst at T. Rowe Price Associates Inc., which owned 240,599 shares as of September. “I’m surprised by the magnitude of the miss.”

The maker of the F-16 jet fighters and Titan rockets said it expects 1998 profit before a charge and gain to increase between 2% and 4%, to a range of $6.15 to $6.30 a share. The company had been expected to earn $6.65, the average estimate of analysts polled by First Call Corp.

For the fourth quarter, the Bethesda, Md.-based company said it expects profit before charges to be about 10% lower than the $1.79 a share it earned for the same period last year. Analysts were expecting $2.06.

Lockheed shares have fallen 24% since Oct. 30. In that time, the company has seen delays in the launch of its Titan missiles and in sales of F-16s to the United Arab Emirates. It also lost a bid for a $3-billion contract to revamp the Internal Revenue Service’s computers.