LOCKHEED MARTIN REVIEWS 1998 AND 1999 OUTLOOK
BETHESDA, MD, December 23rd, 1998 -- Lockheed Martin (NYSE: LMT) announced today that 1998 diluted earnings per share, excluding nonrecurring items, are anticipated to increase between 2 and 4 percent, which is below current analysts' estimates for the year. The Corporation expects fourth quarter 1998 diluted earnings per share, excluding nonrecurring charges related to its majority ownership of CalComp Technology, to be around 10 percent lower than fourth quarter 1997 earnings of $1.79 per share. As described in the third quarter Form 10-Q filed with the Securities and Exchange Commission, total fourth quarter pretax charges for CalComp are expected to range from about $150 to $200 million. The Corporation also indicated that its outlook for free cash flow for the year is above analysts' expectations of $1 billion. Fourth quarter 1998 net sales are expected to be down compared to fourth quarter last year, adjusted for divestitures. Sales declines in commercial space activities, delayed space launches and delayed C-130J deliveries from 1998 into 1999, were cited as the primary reasons for the fourth quarter sales and earnings shortfall.
"We are redoubling our efforts to aggressively reduce our cost base, improve margins, and increase free cash flow through rapid implementation of our LM21 Best Practices program. This program, coupled with the 1999 implementation of a Cash Flow Return on Investment (CFROI)-based value management system throughout the Corporation, reinforces our commitment to creating shareholder value," stated Vance Coffman, chairman and CEO of Lockheed Martin.
The Corporation expects diluted earnings per share to resume a low double-digit growth rate for 1999, from the 1998 base, with estimated annual sales growth in the mid-single digits. Free cash flow greater than $1 billion is expected in 1999 and growing to higher levels thereafter.
"This outlook incorporates the short-term negative effect of substantial investments in our high growth businesses such as telecommunications, launch vehicles, and information and automation services. We fully anticipate these investments to generate significant sales and earnings growth in the future, with commensurate growth in shareholder value," Coffman said.
The Corporation continues to expect that over the five-year period 1999-2003, it will achieve mid-single digit annual sales growth, overall margin improvement, low double-digit annual earnings per share growth, and a total of $8 - $9 billion of free cash flow for the period.
This earnings and cash flow outlook does not reflect potential gains from the divestiture of equity securities in the Corporation's portfolio or equity offerings by any of its subsidiaries.
Financial results for the quarter and full year 1998 will be announced the week of January 25, 1999.
NOTE: Statements which are not historical facts are forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may use terminology such as "expected," "should," "outlook," and "estimated." The conclusions connoted in these statements involve risks and uncertainties that could cause actual results to differ materially from anticipated results, including the effects of government budgets and requirements, economic conditions, competitive environment, timing of awards and contracts; the outcome of contingencies including litigation and environmental remediation; and program performance in addition to other factors not listed. See in this regard the CorporationÂ¿s filings with the Securities and Exchange Commission. The Corporation does not undertake any obligation to publicly release any revisions to forward-looking statements to reflect events or circumstances or changes in expectations after the date of this press release or the occurrence of anticipated events.