Like The Herald Business Journal on Facebook!
The Herald of Everett, Washington

The top local business stories in your email

Contact Us:

Josh O'Connor
Phone: 425-339-3007

Jody Knoblich
General Sales Manager
Phone: 425-339-3445
Fax: 425-339-3049

Jim Davis
Phone: 425-339-3097

Site address:
1800 41st Street, S-300,
Everett, WA 98203

Mailing address:
P.O. Box 930
Everett, WA 98206

HBJ RSS feeds

Lockheed: Sequestration to cut $825 million from revenue

SHARE: facebook Twitter icon Linkedin icon Google+ icon Email icon |  PRINTER-FRIENDLY  |  COMMENTS
The Washington Post
WASHINGTON - Lockheed Martin forecast Tuesday that government budget cuts would wipe out $825 million of the company's anticipated revenue this year.
The automatic federal spending cuts, known as sequestration, went into effect in March and have caused little damage so far, company officials said. But that will change soon, they said.
"We expect to see those impacts grow over the next three quarters," Bruce Tanner, Lockheed's chief financial officer, said Tuesday. "While we're pleased with where we are, we're mindful that sequestration hasn't really hit thus far."
The effect of sequestration has slowly begun to ripple throughout the defense industry. Contractors have complained that the cuts will force layoffs and ramped up efforts to expand into new markets.
For Bethesda, Md.-based Lockheed, the world's largest weapons maker, the early effect is expected to be mostly felt in its information systems and mission systems units. Information technology and training contracts are easier and faster to cut than large weapons systems, such as Lockheed's F-35 fighter jet or a combat ship.
But cuts to those programs could come later, company officials said.
Despite those projections, Lockheed reported that its first-quarter profit jumped nearly 14 percent to $761 million. But sales fell 2 percent to just shy of $11.1 billion.
Lockheed also took a $30 million charge during the quarter related to layoffs. The company trimmed more than 650 employees in its Gaithersburg, Md.-based information systems unit, including about 240 mid-level managers who accepted voluntary layoffs. About 168 of the 650 were Washington area workers, a Lockheed spokeswoman said.
The company has no further "plans for reductions at this point in time," Tanner said.



Share your comments: Log in using your HeraldNet account or your Facebook, Twitter or Disqus profile. Comments that violate the rules are subject to removal. Please see our terms of use. Please note that you must verify your email address for your comments to appear.

You are logged in using your HeraldNet ID. Click here to update your profile. | Log out.

Our new comment system is not supported in IE 7. Please upgrade your browser here.

comments powered by Disqus

Market roundup