Lockheed was able to increase sales, but its information technology business saw a dip.
Lockheed Martin Corp. increased its net sales despite a tough second quarter in 2011 with workforce reductions and fewer sales on an important contract in its information systems division, the company reported on July 26.
Lockheed reported net sales totaling $11.6 billion for the second quarter of the year, compared to $11.3 billion in the same quarter of 2010, according to its financial results.
The corporation’s earnings were reduced by $63 million as it paid out $97 million for severance charges. In June, company executives said they would lay off 1,200 employees from Lockheed's space systems sector by year’s end. Since then they've announced voluntary layoffs that would affect 6,500 employees.
However, executives said they expect to recover a substantial amount of the severance charge in future periods through sales of products and services to the government and other customers.
“During the second quarter, we had strong execution across the company even while implementing difficult measures to right-size our business for an environment that remains challenging,” said Bob Stevens, chairman and CEO. “Our focus in this new reality continues to be on delivering affordable solutions that provide value to both our customers and our shareholders.”
In the quarter, Lockheed Martin’s Information Systems and Global Solutions sector had $2.36 billion in sales. However, that amount was down $161 million, or 6 percent, compared to the second quarter of 2010. For the first half of 2011, the sector’s $4.51 billion in sales were down $246 million, or 5 percent, compared to 2010.
Lockheed attributed the lower sales to the slowdown of its work supporting the 2010 U.S. Census. Revenue from the work declined $240 million for the quarter and $350 million for the first six months of 2011 . Still, these decreases partially were offset by higher volume on numerous smaller programs.
In the Census contact, Lockheed Martin provides the IT, processes and infrastructure to aid the government in counting its people. It was awarded the contract in 2005.
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