Skip to comments.Facing Sequestration And Defense Cuts, Lockheed Gives Aggressive Guidance
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 werent 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. Lockheeds management acknowledged the risks, giving its guidance in the context of no sequestration cuts and a budget in line with President Obamas being approved by Congress.
(Excerpt) Read more at forbes.com ...
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.
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.
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.
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.
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.
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?
They need to sell to India and Japan, like yesterday.
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.
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.
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?
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?
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.
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.
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.
Trro strengths are already being ramped down. Soldiers with waivers are being denied reenlistment, that sort of thing.
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.
Did you know the SS offices are cutting back hours? They’re now even closed on Wednesday afternoons.
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.
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.
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.