Global security, aerospace and IT company, Lockheed Martin, has reported a solid set of results for the six month period to 24th June 2012. Worldwide sales increased from $22.2b to $23.2b leaving the company on track to meet its forecast for the full year. Net earnings from continuing operations increased from $1,304m to $1,449m.
However, the one blot on the horizon across the four business segments was Information Systems and Global Solutions (IS&GS) – the business segment most relevant to the software and IT services (SITS) market.
While all other business segments increased sales year-on-year, IS&GS sales declined by 3% to $157m. This reflects the impact of large contracts coming to their conclusion. The lumpy nature of the IS&GS business in the UK will be particularly apparent during FY12, as FY11 included revenue from UK Census 2011. Indeed, in H2, the results were negatively impacted to the tune of $55m due to the completion of the programme. Overall, we understand that the Census Programme contract adds about £150m to Lockheed Martin’s IS&GS revenues in the UK during a Census year.
It is unclear exactly how the underlying business is performing. However, we do know that Lockheed Martin continues to pursue its ambition to build a larger footprint in UK IT and services and is focusing firmly on the programme management and delivery of complex systems.