Lockheed Martin
Corp., the biggest U.S. defense contractor, and rival Raytheon Co.
reported an increase in fourth-quarter sales of missiles, sensors,
radar and other electronics as the military prepares for war.
Lockheed’s net loss shrank as revenue from surveillance and
missile-control systems rose 10 percent to $3 billion. Raytheon,
the maker of the Stinger and Tomahawk missiles, said profit more
than doubled as sales of missiles and sensors rose 13 percent.
U.S. defense spending is rising amid military action in
Afghanistan and Iraq that has the government calling for equipment
to modify missiles, aircraft, warships and satellites. Analysts
said Raytheon, the fourth-largest U.S. contractor, may benefit the
most, though profit may be hurt this year by falling civilian-
aircraft sales and rising costs to complete power-plant projects.
“Lockheed would be a little bit cleaner play than Raytheon
because you don’t have the power plants, you don’t have the
commercial aircraft,” said Wayne Wilbanks, chief of investments
at Wilbanks Smith & Thomas Asset Management. “But you have more
hardware with Lockheed. Raytheon’s much more electronics and
missiles, which is a bit more stable area of defense spending.”
Wilbanks cited Lockheed’s work on large defense projects such
as the Joint Strike Fighter, which have a greater tendency to be
delayed or scaled back. Sales of military aircraft fell in the
quarter because of eight fewer deliveries of the C-130J transport
plane and less work on the F/A-22 fighter jet, Lockheed said.
General Dynamics Corp., the maker of the Abrams tank, said
this week that fourth-quarter profit rose 7 percent, helped by
sales of combat vehicles. Boeing Co., the No. 2 U.S. defense
contractor, and No. 3 Northrop Grumman Corp. report next week.
Bloomberg News
