Advertisement
Singapore markets closed
  • Straits Times Index

    3,224.01
    -27.70 (-0.85%)
     
  • S&P 500

    5,248.49
    +44.91 (+0.86%)
     
  • Dow

    39,760.08
    +477.75 (+1.22%)
     
  • Nasdaq

    16,399.52
    +83.82 (+0.51%)
     
  • Bitcoin USD

    70,559.34
    +318.05 (+0.45%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.37
    +20.39 (+0.26%)
     
  • Gold

    2,232.10
    +19.40 (+0.88%)
     
  • Crude Oil

    82.53
    +1.18 (+1.45%)
     
  • 10-Yr Bond

    4.1960
    0.0000 (0.00%)
     
  • Nikkei

    40,168.07
    -594.66 (-1.46%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • FTSE Bursa Malaysia

    1,530.60
    -7.82 (-0.51%)
     
  • Jakarta Composite Index

    7,288.81
    -21.28 (-0.29%)
     
  • PSE Index

    6,903.53
    +5.36 (+0.08%)
     

Lockheed CEO still likes Sikorsky despite slumping sales to energy sector

Marillyn Hewson, Chairman, President and CEO of Lockheed Martin, participates in a panel discussion at the 2015 Fortune Global Forum in San Francisco, California November 3, 2015. REUTERS/Elijah Nouvelage

By Andrea Shalal

WASHINGTON (Reuters) - Lockheed Martin Corp (LMT.N) has "no regrets" about buying Sikorsky for $9 billion even though sliding oil prices have taken a bigger bite than expected from the company's commercial helicopter sales, Chief Executive Marillyn Hewson said Tuesday.

Hewson told reporters at the company's annual media day that buying Sikorsky from United Technologies Corp (UTX.N) was "absolutely a great opportunity" and Lockheed remained confident about its long-term prospects, despite the drop in commercial sales as energy companies have slashed spending.

She said she expected oil prices to recover over the longer term.

ADVERTISEMENT

Lockheed closed its $9 billion acquisition of Sikorsky from United Technologies Corp (UTX.N) in November.

Sharp declines in oil revenues have resulted in bigger than expected declines in Sikorsky's commercial helicopter revenues, prompting some analysts and industry executives to say Lockheed likely overpaid for the storied Black Hawk makers.

Lockheed Chief Financial Officer Bruce Tanner rejected speculation that Lockheed had paid 20 times Sikorsky's earnings before interest, taxes, depreciation and amortisation, and said that was an "overstated number."

He told Reuters in an interview that Lockheed remained upbeat about Sikorsky's longer-term prospects, and said its cash generation would also increase as it moved ahead on several U.S. military development programs, including a new presidential helicopter programme.

"We did not buy this business for the next three years; we bought it for the next three decades," Tanner said.

Dale Bennett, who heads Lockheed's Mission Systems and Training business that now includes Sikorsky, said the unit's margins were on par with what Lockheed was used to, and its revenues and cash generation would improve in coming years.

"There's absolutely no buyer's remorse," Bennett told Reuters in an interview at the company's annual media day. "It’s (just) going to look a little depressed for the first couple of years as we absorb the amortisation and the integration costs."

Lockheed officials said they were optimistic about foreign sales prospects for CH-53K heavy lift helicopters and H-60 Black Hawk helicopters built by its new Sikorsky unit, which would help offset the slump in commercial orders.

(Reporting by Andrea Shalal; Editing by David Gregorio, Bernard Orr)