Lockheed Martin (LMT) earnings hit bullseye

Lockheed Martin (NYSE:LMT) today announced strong third-quarter earnings. In light of the booming business, it also increased its 2007 return on invested capital projection to 20%, and forecasts 2008 ROIC of as much as 18%.



The company reported net earnings for the quarter of $766 million, up from $629 million in the same quarter of 2006. Diluted EPS for the quarter was $1.80, well above analyst expectations of $1.64 and up from $1.46 in 2006. The performance supports the company's July updated projection that 2007 EPS will reach $6.70-$6.85.

Most impressively, each of the four business segments comprising Lockheed reported gains. Operating profits for Aeronautics was up 12.4%, primarily due to strong combat aircraft sales. Electronic Systems rose 12.3% due to missile and maritime sales. Information Systems and Global Services climbed 9.1% as the company's combat support services realized higher volume, and Space Systems finished 10% over same quarter 2006 thanks to satellite and missile systems sales.

In September, the company announced a 20% dividend increase for the second quarter of 2007, as well as increasing its buyback program by 20 million shares.

With a weak dollar, the emergence of new economies around the world interested in developing national defenses, and renewed interest in space programs, the company seems to have found the sweet spot in numerous markets. Investors seem to agree. The stock was up by 0.46% in early trading, to $107.70.

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