New York (AirGuideBusiness - Aerospace & Defense News - Defense North America) Apr 29, 2012
General Dynamics General Dynamics says defense cuts caused Q1 profits to fall. General Dynamics pointed to reduced military spending as the cause of its first-quarter decline in net income. The Falls Church, Va.-based defense firm says it's working to boost productivity and trim costs to compensate for the slowdown in orders. Apr 26, 2012
Lockheed Martin Lockheed Martin CEO will step down in January. Lockheed Martin CEO Bob Stevens, 60, says he will step down and turn the post over to Lockheed President Chris Kubasik in January. Stevens said his decision was prompted by the prospect of a long-term struggle with defense spending cuts, which he expects to last past what would be his mandatory retirement age of 65. Lockheed said this week that it was bracing for the sweeping spending cuts that would come as part of budget sequestration Apr 27, 2012
Lockheed Martin Lockheed Martin Profit Rises 20% as Stevens to Retire. Lockheed Martin Corp. (LMT), the worldOs largest defense company, reported first-quarter profit rose 20 percent as Robert Stevens, the chairman and chief executive officer, announced plans to retire. Stevens, 60, will step down as CEO in January and be replaced by Chris Kubasik, 51, currently the president and chief operating officer, Lockheed said today in a statement after the financial results were announced. Stevens intends to remain chairman until 2014. Marillyn Hewson, 58, will succeed Kubasik, the company said. A former U.S. Marine Corps corporal, Stevens came to Lockheed when the defense contractor acquired Loral Systems Manufacturing Co. in 1996. He had been at Loral since 1987. Stevens succeeded Lockheed CEO Vance Coffman in August 2004. StevensO tenure as the CEO has been marked by the challenges of designing and building the F-35 Joint Strike Fighter, LockheedOs single largest program and, at about $382 billion, the PentagonOs most expensive weapon system. The jetOs development has been delayed, costs have risen and the Defense Department now plans to reduce its purchases of the planes. OI did not learn about leadership in business school,O Stevens told the Marine Corps Heritage Foundation in May 2010 after receiving a leadership award. OI learned about leadership when I was 18 years oldO in the Marines. Stevens holds a graduate degree from Columbia University in New York. Kubasik said today that developing international markets for the F-35, continued building of the U.S. NavyOs Littoral Combat Ship and winning a new U.S. Air Force bomber will drive the companyOs growth. Lockheed also sees health care and energy as Oadjacent marketsO that offer potential for growth as new starts in the U.S. defense industry are squeezed by demands to cut the U.S. budget deficit, Kubasik said in an interview. Quarterly Results The company said today in a statement that first-quarter net income from continuing operations rose to $665 million, or $2.02 a share, from $556 million, or $1.57 a share, a year earlier. The average estimate of 20 analysts surveyed by Bloomberg was for a profit of $1.71 a share. Sales increased 6.3 percent to $11.3 billion aided by sales of jet fighters, cargo planes and electronic systems. The company reaffirmed its 2012 forecast made in January of profit of $7.70 to $7.90 a share. Lockheed rose 72 cents to $91.70 at the close in New York trading, the highest price since Oct. 20, 2008, and has gained 13 percent this year. The threat of automatic cuts in the U.S. defense budget of $500 billion over 10 years, which would take effect starting in January unless Congress and the president reverse them, is likely to affect the F-35 program. F-35 Sales The Pentagon already has proposed reducing its budget by about $490 billion over a decade, a proposal that includes buying 13 fewer F-35 jets than previously planned in fiscal 2013. Purchase of as many as 179 planes may be pushed off beyond 2017, the Pentagon has said. Even with the proposed long-term cuts to the F-35 program, U.S. orders for trial production lots of the jet drove sales and profit at LockheedOs Aeronautics unit. More than half of the increase in sales at the unit during the quarter came from F-35 orders, Bethesda, Maryland-based Lockheed said in the statement today. Aeronautics sales rose 18 percent to $3.71 billion and unit profit increased 17 percent, the company said. Sales of F-16 jets and C-130 cargo planes also contributed to the revenue increase, the company said. A union strike at the companyOs Fort Worth, Texas, plant where F-35 and F-16 jets are assembled, hasnOt Obrought us to our knees,O Kubasik told reporters on a conference call today. Fort Worth Strike The International Association of Machinists began striking on April 23 in protest against LockheedOs proposal to switch employeesO pension plans to a defined contribution system from a defined benefit plan, Stevens and Kubasik said. OI was personally surprised that the union chose to strike on this matter,O Stevens said. Jennifer Whitlow, a Lockheed spokeswoman said in an e-mail that Owe are willing to meet with the union at any time to continue discussions, but at this time, neither party has requested a meeting.O Lockheed has sufficient components to meet immediate needs and is using salaried employees to continue operations, she said. Katrina White at the Fort Worth chapter of the International Machinists Union said she would seek a comment from the union officers. Unit Results Sales at LockheedOs Electronics Systems unit, which makes anti-missile systems and oversees the NavyOs Littoral Combat Ship program, rose 3.6 percent to $3.6 billion because of ship and aviation programs. Profit increased 25 percent due to lower risk in rocket launch systems and the Joint Air-to-Surface Standoff Missile, the company said. Space Systems sales increased 2.4 percent to $1.89 billion, Lockheed said. Unit profit rose 4.1 percent. Sales at the Information Systems & Global Solutions unit fell 2.7 percent to $2.1 billion. Profit at...