Lockheed profits rise despite sequester

Lockheed’s increased profits occurred despite a decrease in
net sales in the third quarter by 4 percent to $11.3 billion.

{mosads}The company’s quarterly report shows how the biggest defense
firms have been able to stave off the impacts of defense budget cuts and
sequestration for their investors by cutting costs and laying off workers.

Last week, for instance, Lockheed announced it was laying
off 600 workers, the latest in a series of downsizing moves for the defense
firm over the past several years.

The company reported that it expects its 2014 sales to decline
slightly from 2013 levels, but that its operating margin would remain above
11.5 percent.

Lockheed and other defense firms have warned that
sequestration would be devastating for the industry, but thus far, most of the
large defense firms are thriving despite the cuts.

Defense trade associations have said that smaller firms are
feeling the brunt of the cuts, however. And the industry warns that the
effects of the sequester will grow exponentially worse in 2014 and beyond for the
all contractors because many defense firms are working on prior year contracts that have been unaffected by sequester.

Lockheed’s stock has increased 47 percent since March 1, the day the sequester took effect, when it was trading at $87.75.