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Facing Sequestration And Defense Cuts, Lockheed Gives Aggressive Guidance
Forbes ^ | 24 Jan 13 | None

Posted on 01/24/2013 3:57:29 PM PST by SkyPilot

Despite uncertainty over the future defense budget and the possibility of sequestration, and after a recent scandal that led to the resignation of CEO-elect Chris Kubasik, Lockheed managed to deliver a decent fourth quarter on Thursday. The defense and aerospace company beat top-line estimates and revealed a record backlog, while guiding aggressively for fiscal 2013. Investors weren’t pleased, though, as the stock sold-off in early trading.

Net earnings from operations fell a dramatic 18.5% to $569 million as Lockheed made large pension contributions and paid high tax rates. In a per share basis, Lockheed earned $1.73, well below the $1.82 estimate.

------------------------

Lockheed gave a bullish outlook for the year despite heightened political uncertainty. The possibility of sequester cuts kicking in, and the lack of a budget, have put pressure on defense companies that rely on government funding including Lockheed, Raytheon, Honeywell, Northtrop Grumman, and Boeing, among others. Lockheed’s management acknowledged the risks, giving its guidance in the context of no sequestration cuts and a budget in line with President Obama’s being approved by Congress.

(Excerpt) Read more at forbes.com ...


TOPICS: Extended News; Government; News/Current Events
KEYWORDS: defense; layoffs; sequestration
There were numerous news stories leaked by both political parties today that Sequestration is "going to be allowed to happen."

Despite humming the humming through the graveyard outlook, Lockheed knows this, so do Raytheon, Honeywell, Northrop Grumman, and Boeing.

Lockheed had a chance in October to issue layoff notices, but sold their soul to Obama. The other companies did not to that degree, but all of them should have rang the alarm during the campaign. They were lied to, and the most unreal thing is that they believed the Democrats.

Romney was clear that he would have stopped Sequestration.

Things are going to get very, very ugly - and fast.

When Sequestration kicks in, a lot of communities and businesses are going to be shocked that it affects them. Not only are layoffs going to happen within industry, but hundreds of thousands of feds will be furloughed as well.

1 posted on 01/24/2013 3:57:39 PM PST by SkyPilot
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To: SkyPilot

Lockheed’s backlog is not going to look so impressive in about 90 days. I am also hearing that sequestration will be allowed to happen, both parties want it, probably for different reasons. Companies in the service arena are being told to stand by for some massive cuts. Option years not being exercised. Stop work orders on funded efforts. Delays in new contracts. Lot’s of people will soon hit the streets and be unemployed. Probably won’t help whatever mythical economic recovery there may be.


2 posted on 01/24/2013 4:14:57 PM PST by centurion316
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To: SkyPilot

Trust me. As a contractor to a company mentioned here it has hit full force. We are like the truck drivers who predicted the recession long before it it. This is un-recoverable. Giving up defense work.


3 posted on 01/24/2013 4:20:00 PM PST by ImJustAnotherOkie (zerogottago)
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To: SkyPilot

Yep.

All expenses are being currently examined by people higher and higher in the food chain right now.

I just had a business trip cancelled that I was approved to go on next week.

No purchasing anything, not even office supplies.


4 posted on 01/24/2013 4:25:43 PM PST by sauropod (I will not comply)
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To: SkyPilot

Generally, if you are a gov’t worker...you need to put up $3k minimum right now for the furlough coming up from early April to the end of September. It’s very likely that every single GS will have to pull a minimum of two days of furlough a month, and possibly up to one day per week.

Here’s the curious thing....after you’ve endeared that furlough game and think that October gets better...you simply get a 3-month rest period, and the next furlough period will start, with a likely repeat of the same deal...two to four days a month without pay.

A bunch of guys are going to be looking for part-time work on the side...to make up for the salary loss...but in this environment....I wouldn’t expect much.


5 posted on 01/24/2013 4:27:19 PM PST by pepsionice
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To: SkyPilot

I still think a lot of the “recovery” is simply due to Government spending period. At least with defense, when the $$ is spent, you get something of value (planes, ships, etc) and keep factory workers, engineer, and scientists employed. When you spend the $$ on disability and welfare, you keep the supermarkets, liquor stores and strip clubs humming.

Which is better for America’s future?


6 posted on 01/24/2013 4:38:55 PM PST by rbg81
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To: SkyPilot

They need to sell to India and Japan, like yesterday.


7 posted on 01/24/2013 4:55:45 PM PST by Vince Ferrer
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To: ImJustAnotherOkie; centurion316
I read yesterday that one Democrat was saying "thank goodness" the Earned Income Tax Credit was "not at all affected" by Sequestration.

Isn't EITC something like $4K that we are giving people who do not pay Federal taxes?

It is just incredible to me what has happened to this country.

8 posted on 01/24/2013 5:16:27 PM PST by SkyPilot
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To: rbg81
Defense always has a multiplying affect on the economy. One reason is what you pointed out, it produces something of value in terms of aircraft, ships, etc. Another reason the high tech nature of the business. If it were not for Defense research, a whole host of our modern tech industry never would have accomplished what they accomplished.

Moreover, many who work in Defense are highly educated. Highly educated people generally do not blow their money on drugs, strip clubs, and liquor stores. Oh, some of them do, but not to the degree of the folks who collect welfare.

Another factor not generally considered is Foreign Military Sales (FMS), which pumps billions into our economy.

Washington DC is "giving" money away hand over fist through entitlements, but is going to choke the life out of our economy through Sequestration. It is akin to being led off a cliff by a madman.

9 posted on 01/24/2013 5:22:50 PM PST by SkyPilot
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To: pepsionice
I wager that if Congressional Staff members were subject to a furlough, we would see legislative fixes being submitted to their dolt Senators and Representative non-stop.

So, riddle me this. The Federal Government has hundreds of thousands of workers that it directly employs in logistics, medical support, engineering, maintenance, training, and contracting that it won't be paying even though they have to accomplish the same amount of work, yet that very same Federal Government just approved $200 Billion to extend unemployment benefits to pay people it does not directly employ not to work?

Did I get that right?

10 posted on 01/24/2013 5:29:32 PM PST by SkyPilot
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To: SkyPilot

Does anyone or can anyone find out (I can’t) what gets “sequestered” on the entitlements side? Or is it just Defense that gets hit?


11 posted on 01/24/2013 5:31:06 PM PST by jeffc (The U.S. media are our enemy)
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To: rbg81
"Which is better for America’s future?"

If you're talking about Democrat America's future, it's definitely the entertainment industry (including strip clubs), liquor stores, trial lawyers (for profit income redistribution), pay-for-play public works projects / roads-to-nowhere, and large unionized police forces to keep the wheels from flying-off.
12 posted on 01/24/2013 5:50:16 PM PST by indthkr
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To: jeffc
Entitlements are exempt. Jack Lew, the White House OMB Director, was the author of Sequestration. Bob Woodward confirmed this and published it. The Senate Democrats finalized the poison pill of a "deal" back in 2011 so that Defense took 50 % of the $1.2 Trillion in cuts, even though Defense is about 18 or 19% of the budget. All other government agencies will take a hit, but none as high as Defense.

What makes it even worse for the DoD is that it already took a $500 Billion hit before the 2011 Budget Control Act. This gutting by 10% this far into the fiscal year will be the greatest defense evisceration imaginable. Moreover, the Pentagon cannot touch troop strength accounts, so they have to gut Operations and Maintenance by about 25 to 30%' depending on who you talk to. This may be unrecoverable.

13 posted on 01/24/2013 6:12:16 PM PST by SkyPilot
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To: indthkr

What really angers me is the gutless Republicans. We know the Democrats are Communist Fascists, it is who they are. The GOP are supposed to be the voice of reason, yet they have abandoned the military and industry. They have instead become the “Me Too” Entitlement cheering section for the Democrats.


14 posted on 01/24/2013 6:17:06 PM PST by SkyPilot
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To: SkyPilot
"The Big Chicken" looks right at Lockheed Martin and Dobbins ARB on the horizon only one mile away. We soon could be an economic ghost town. It doesn't take an aerospace scientist to see handwriting written on the wall.
In January 1993, storm winds damaged the structure, and rather than tear it down KFC was forced by public outcry to re-erect the building. Among those who complained about the Big Chicken being torn down were pilots, who actually used the building as a reference point when approaching Atlanta and Dobbins Air Reserve Base.

15 posted on 01/24/2013 6:33:17 PM PST by higgmeister ( In the Shadow of The Big Chicken!)
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To: SkyPilot

Trro strengths are already being ramped down. Soldiers with waivers are being denied reenlistment, that sort of thing.


16 posted on 01/25/2013 2:30:07 AM PST by patton (Tinker toys, watches, and shiny things - we all sell rocks for a living.)
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To: patton
That's more bad news. Thanks for the update, but I am sad to hear it.

It is just another case of those who have given and sacrificed the most for this country being sent to the back of the bus in lieu of those who have given the least.

When I see fistfight break out between single mothers in an East St. Louis Food Stamp office, I realize that our nation may never recover.

How far we have fallen?

I watched an episode of "Band of Brothers" last night. It was heartening, and sad, to realize that America has morphed from a nation blessed by God, to one that has turned away from Him.

17 posted on 01/25/2013 3:35:59 AM PST by SkyPilot
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To: pepsionice

Did you know the SS offices are cutting back hours? They’re now even closed on Wednesday afternoons.


18 posted on 01/25/2013 8:31:18 PM PST by Terry Mross
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To: higgmeister

When people are being given directions and they don’t know about the big chicken, everyone knows you’re not from around there. It happened to me.


19 posted on 01/25/2013 8:35:38 PM PST by Terry Mross
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To: SkyPilot
There were numerous news stories leaked by both political parties today that Sequestration is "going to be allowed to happen."

Okay. Something has to slow the crazy spending. Back to 2007 levels we go.

...but hundreds of thousands of feds will be furloughed as well.

Now we're getting somewhere.

20 posted on 01/25/2013 8:36:12 PM PST by Lancey Howard
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To: Lancey Howard
I read yesterday that by furloughing every single Dept of Defense employee, our frugal Federal government will save $5 Billion.

DoD, mind you, is Constitutional. Social Security, Medicare, Medicaid, ObamaCare, Food Stamps, Unemployment checks, and Welfare are not.

Defense has already been slashed by %500 Billion over 10 years, and Sequestration cuts another $600 Billion (at least).

So furloughing every DoD scientist, nurse, doctor, logististician, maintainer, and engineer will save about 0.25% towards the total Sequestration bill.

You can applaud that. But in reality, that furlough will do nothing but harm middle class, hard working, patriotic American who actually contribute to this nation, while the free loaders, the lazy, and takers get off Scott free. In fact, we just added another $200 Billion in January to extend unemployment benefits (again) for people who don't work. Oh, and you know that "Earned" Income Tax Credit? You know, where the Feds giveaway up to 4 grand to Obama voters who pay no Federal income taxes in the first place. Fully paid this year.

If that is what you want to applaud, go right ahead.

All Congress and Obama are doing is shooting the loyal, wounded dog in their house, and letting the rats raid the place.

Until Entitlements are reformed, this country is on the path to ultimate destruction. I think even you know that too, but you are unwilling to admit it.


21 posted on 01/26/2013 5:32:26 AM PST by SkyPilot
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To: higgmeister

Mandatory photo

22 posted on 01/26/2013 5:49:26 AM PST by bert ((K.E. N.P. N.C. +12 .....The fairest Deduction to be reduced is the Standard Deduction)
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