SOURCE: The Bedford Report

The Bedford Report

February 10, 2011 08:46 ET

Defense Contractors Facing a Transitional Phase

The Bedford Report Provides Analyst Research on Lockheed Martin & Raytheon

NEW YORK, NY--(Marketwire - February 10, 2011) - The Aerospace & Defense Industry is in transition as the US Defense Department slows down the growth seen during the Bush years. The Defense Department accounts for close to 20 percent of US federal spending and roughly half of discretionary, non-mandated spending -- making it a target for lawmakers looking for ways to cut the ballooning budget deficit. The chief executives of 14 US defense companies urged Congress to pass a defense spending bill for fiscal 2011 instead of extending the current stopgap measure that keeps funding at 2010 levels. Defense contractors warned that the defense industry could face schedule delays, higher costs and other dangers unless lawmakers pass a fiscal 2011 defense appropriations bill. The Bedford Report examines the outlook for companies in the Aerospace & Defense Industry and provides research reports on Lockheed Martin Corporation (NYSE: LMT) and Raytheon Co. (NYSE: RTN). Access to the full company reports can be found at:

The US government threw yet another curveball at Major defense contractors earlier this week when the Pentagon said it would not support consolidation between major military contractors. Defense Undersecretary Ashton Carter explains that while the Pentagon welcomes mergers, spinoffs and divesture that lead to lower production costs, mergers between big contractors would raise concerns over the industry's stability.

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In recent earnings news, Raytheon said net income was $459 million, or $1.25 a share, for the fourth quarter, compared with $504 million, or $1.30 a share, a year earlier. Raytheon forecast profit from continuing operations of $4.83 to $4.98 for fiscal 2011. It expects full-year sales of $25.5 billion to $26.3 billion, compared with $25.2 billion for 2010.

Lockheed Martin forecast current-year earnings of $6.70 to $7 a share on revenue of $45.75 billion to $47.25 billion. Lockheed said its fourth quarter net earnings rose to $983 million, or $2.73 a share, from $827 million, or $2.17 a share, in the year-earlier period.

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