Lockheed Martin reports sales growth despite cost of downsizing
Lockheed Martin Corp. saw its revenue grow by 7-percent in the third quarter of 2011, even as the company dealt with the cost of downsizing its workforce, the company reported Oct. 26.
Third quarter net sales reached $12.1 billion, compared to $11.3 billion in 2010. Earnings from continuing operations during the third quarter were $665 million, compared to $557 million in 2010, according to its quarterly earnings statement.
Despite the increase, the previous quarter’s results included a special charge of $39 million related to planned workforce reductions at Information Systems and Global Solutions (IS&GS) and corporate headquarters. The cost reduced its earnings by $25 million. Like the just-ended quarter, the third quarter of 2010 included a special charge of $178 million related to the Voluntary Executive Separation Program, which decreased earnings by $116 million.
“We continue to take aggressive actions, including painful workforce reductions, to reduce costs and deliver value to our customers and shareholders in this challenging global security and economic reality that we expect will extend into 2012,” said Bob Stevens, chairman and CEO.
IS&GS has concluded a voluntary layoff program aimed at reducing its employee base by 250 by February, the company announced Oct. 25. Other workforce reductions continue across the corporation, including 340 employees from a voluntary and involuntary layoff program for corporate headquarters and Enterprise Business Services employees and the various sectors.
Despite the workforce issues, the IS&GS had $2.3 billion in net sales for the quarter, and $6.8 billion for the first three quarters of the year. The sector’s net sales for the third quarter declined by 8 percent, or $202 million, compared to 2010. In the first three quarters of 2011, IS&GS is down 6 percent, or $448 million, compared to last year.
Lockheed said the decreases were due to the end of the Decennial Response Integration System contract, which supported the 2010 census. Operating profit in the IS&GS segment during the third quarter and first nine months of 2011 essentially was unchanged though. Several other smaller programs had increases in business, such as the Transportation Worker Identification Credential and the Automated Flight Service Station.
“Our focus on program execution in support of our customers resulted in a strong third quarter,” Stevens said.
Lockheed Martin, of Bethesda, Md., ranks No. 1 on Washington Technology’s 2011 Top 100 list of the largest federal government contractors.
Matthew Weigelt is a former FCW senior writer who covered acquisition and procurement.