Lockheed Martin Corp. on Tuesday announced net sales of $11.1 billion and net earnings from continuing operations of $763 million for the first quarter of 2017. Net sales increased from $10.4 billion in the same three-month period of 2016, while year-over-year net earnings fell from $806 million.
Lockheed subsidiary Sandia Corp., with only a few days left as the management and operations contractor for the National Nuclear Security Administration’s Sandia National Laboratories, operates within the company’s Space Systems division.
This segment reported $2.4 billion in net sales during the quarter, up from $2.1 billion from the same time last year – an increase it attributed to net sales from the AWE Management Ltd. venture. The company last year increased its ownership interest in AWE, which is under contract with the United Kingdom’s Defense Ministry to manage the nation’s nuclear deterrent sites. Operating profit for the Space Systems segment was $288 million, up from $244 million in the same quarter of 2016.
The NNSA last year awarded a Honeywell subsidiary the management and operations contract for Sandia. A Lockheed subsidiary won the management contract for the Nevada National Security Site in 2016, but the award was rescinded when the NNSA discovered that ownership of the subsidiary had transferred to Leidos with Lockheed’s Information Systems & Global Solutions business segment; the NNSA has not yet awarded a new contract for the site.
Company executives did not discuss their work in support of the NNSA during a Tuesday earnings call. Lockheed President and CEO Marillyn Hewson did say, however, that “we think we have a strong offering” for the contract to develop the Ground-Based Strategic Deterrent.
The Air Force plans to award up to two contracts in the fourth quarter of this fiscal year for an advanced development phase of the GBSD intercontinental ballistic missile, which will replace the decades-old Minuteman III. Lockheed, Northrop Grumman, and Boeing are among the bidders for the program.
Hewson noted on the call that funding for new programs is restricted under the continuing resolution funding the government until Friday. She said Lockheed hopes Congress will approve a defense appropriations act for fiscal 2017, “as we feel a further lack of budget clarity would have longer-term consequences for our armed forces and our industry, and we continue to urge our country’s leadership to reach an agreement.”
