BETHESDA, MD-Major defense contracting firms, such as Lockheed Martin, are posting higher profits and are weathering the adverse impacts of the federal sequester.
The Bethesda, MD-based firm reported a rise of 10% in profits to $859 million on Tuesday, although its revenue did decline in the second quarter.
Lockheed Martin had predicted that sequestration would reduce revenue by $825 million this year, but it has stepped away from that dire forecast. In fact, company officials now expect profit will be higher than they initially projected, according to the Washington Post.
“We're seeing less impact . . . than we had expected to see through the first half of the year,” Bruce Tanner, Lockheed's chief financial officer, said. “It's somewhat hard for us to imagine that the full [anticipated] impact will be realized.”
Analysts believe the defense contracting firms are now posting higher profits in part because they made cuts in anticipation of defense contracting reductions by the federal government. See story in the Washington Post.
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