- The Washington Times - Wednesday, July 24, 2013

Large defense-contracting companies are raking in profits amid Pentagon budget cuts, despite having warned of severe economic setbacks if the automatic spending reduction called sequestration were to occur.

Lockheed Martin, the world’s biggest defense contractor, reported Tuesday that its profits rose by 10 percent, to $859 million, during the second quarter of the year.

Three other large defense contractors — General Dynamics, Northrop Grumman and Boeing — are scheduled to announce their earnings Wednesday.

“Overall, we had strong operational performance and program execution across all business areas this quarter,” said Marillyn A. Hewson, president and CEO of Lockheed Martin, which is based in Bethesda, Md.

Defenders of the company said it had prepared well by shedding jobs last year, meaning that profitability jumped even with revenue down slightly.

“As was the case last quarter, we saw minimal impact to our sales in the second quarter as a result of sequestration actions,” Bruce Tanner, Lockheed’s chief financial officer, said Tuesday during a conference call with analysts Tuesday, according to a transcript.

Ms. Hewson added, “Even in an uncertain budget environment, our portfolio of products and capabilities, robust cash generation, and outstanding performance by our 116,000 employees, continue to deliver value to our customers and shareholders.”

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