Lockheed bullish on rise in defense and homeland security spending

Lockheed Martin, the world’s largest defense contractor, is confident that the new Congress, controlled by the Democrats would approve increased U.S. defense spending as the world responded to the “uncertain security market” from events such as the recent Chinese anti-satellite test.

“In our judgment, with a $14.2 trillion economy, the nation has a lot to protect, and we might see even more funds flow in,” said Bob Stevens, Lockheed Martin’s chairman and CEO.

Lockheed raised its 2007 earnings forecast and announced plans to boost margins and raise operating earnings by a $1 billion by the end of the decade. Stevens pointed to an increased focus on homeland security and law enforcement work in addition to its core aircraft, ship, and missiles business, but ruled out any move into commercial aerospace.

Lockheed’s earnings per share in 2006 were $5.80, up from $4.10 in the previous year. Yearly operating profit was $3.95 billion, up from $3 billion. In the fourth quarter, net profit rose to $729 million from $568 million the year before, with the aeronautics business posting a 32 percent rise in profits. In November, Lockheed received a $1 billoin order for an extra 24 F-22s, bringing to 131 the total of the new fighter jets under contract.

Northrop Grumman, maker of warships, nuclear submarines, UAVs, and advanced electronics for fighter jets and other weapons, reported quarterly profit of $453 million up from $331 million the year before. Earnings for 2006 rose 16 percent to $4.44 per share, up from $3.83 per share in 2005. Operating profit rose 13 percent to $1.6 billion.

-read more about Lckheed Martin’s Q4 and year-end results in the news release; read more about Northrop Grumman’s Q4 and year-end results in this news release