This summary is based on the fourth quarter fiscal 2007 earnings call conducted by Lockheed Martin Corporation (LMT: chart) on January 24, 2008.
Management:
Chairman, President, and CEO: Robert J. Stevens
VP of IR: Jerry Kircher
CFO and EVP: Bruce L. Tanner
Key Investors Issues
- EPS were $1.89 per share compared to $1.68 per share last year.
- Profit was $799 million compared to $729 million in the year-earlier quarter.
- Net sales were flat at $10.84 billion.
Fourth Quarter Highlights
Net earnings were $799 million ($1.89 per share), compared to $729 million ($1.68 per share) in 2006.
- Net sales were $10.8 billion in both the fourth quarter of 2007 and 2006.
Cash flow from operations was $420 million.
The corporation continued to execute a balanced cash deployment strategy during 2007 as follows:
- Repurchased 3.0 million shares at a cost of $322 million;
- Made discretionary payments of $491 million to pre-fund a portion of future years'' funding requirements for the corporation''s defined benefit pension plan trust and retiree medical plan trust;
- Made capital expenditures of $460 million;
- Paid cash dividends totaling $175 million;
- Paid $12 million for acquisition and joint venture activities.
Net sales for Aeronautics decreased by 11% from the comparable 2006 period.
- Sales declines were driven by lower volume on F-16 and F-35 programs in Combat Aircraft and C-130 programs in Air Mobility.
- In Combat Aircraft, volume increases on the F-22 program more than offset declines on the F-16 program. These increases were offset partially by lower volume on C-130 programs in Air Mobility.
- Segment operating profit for Aeronautics increased by 1% from the comparable 2006 period.
- Combat Aircraft operating profit increased due to improved performance on F-16 and F-22 programs.
- Air Mobility and Other Aeronautics programs operating profit decreased due to lower volume on support and sustainment activities.
Net sales for Electronic Systems increased by 3% from the comparable 2006 period.
- Sales increases at Maritime Systems & Sensors (MS2) more than offset decreases at Missiles & Fire Control (M&FC) and Platform, Training & Energy (PT&E). The growth at MS2 was primarily driven by increased volume in undersea and tactical systems activities. This growth partially was offset by declines in volume on certain tactical missile and air defense programs at M&FC and platform integration activities at PT&E.
- Segment operating profit for Electronic Systems declined by 1% from the comparable 2006 period. Operating profit declined due to lower volume and performance on certain international air defense programs at M&FC and surface systems activities at MS2. This decline partially was offset by increases from improved performance in platform integration activities at PT&E.
Net sales for IS&GS increased by 6% from the comparable 2006 period.
- The increase was primarily attributable to sales growth at Global Services and Information Systems. The increase in Global Services sales was due to higher volume and growth in mission services activities including the impact of the acquisition of Pacific Architects & Engineers, Inc. (PAE) in September 2006. The sales increases at Information Systems were due to growth in information technology and the acquisition of Management Systems Designers Inc. (MSD) in February 2007. Mission Solutions sales were relatively unchanged.
