Earnings Reports for Jan. 25

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JDS Uniphase Corp. Revenues Surge

JDS Uniphase Corp. the world's No. 1 supplier of fiberoptic components, said its second-quarter results edged above analyst expectations by 2 cents driven by ongoing strong demand.

JDS Uniphase reported pro forma net earnings excluding goodwill of $208 million, or 21 cents per share, compared with year-earlier earnings of $177 million, or 18 cents a share. The pro forma results include revenues from the E-Tek Dynamics Inc. acquisition in June 2000.

Revenues for the quarter surged 161 percent to $925 million over $354 million in the same period last year.

On average, 30 analysts polled by research firm First Call/Thomson Financial expected earnings of 19 cents per share, while the consensus revenue estimate from 12 analysts was $924 million.

The company also said it expects third-quarter pro forma earnings equal to or slightly better than the second quarter, with revenues between 7 percent and 10 percent above the second quarter.

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Lockheed Martin Beats Expectations

Lockheed Martin, theworld's largest defense contractor, reported todaysharply lower fourth-quarter profits but beat Wall Streetforecasts as sales from its systems integration, space systemsand aeronautics businesses increased.

Maryland-based Lockheed, maker of the F-16 fighter jet,also raised its growth estimate for 2001 earnings, targeting 25 percent to 30 percent improvement from 2000 levels, before unusualitems. That is up from earlier guidance of 20 percent growth.

For the fourth quarter, Lockheed posted net earnings of $89million, or 21 cents per share, down 70 percent from the $293million, or 76 cents per share, a year earlier.

Excluding unusual and one-time items, operating income was38 cents a share, vs. 59 cents in the same period of 1999.Analysts had expected operating earnings of 36 cents per share,according to First Call/Thomson Financial, which tracksestimates.

Net sales rose to $7.6 billion from $7.0 billion a yearearlier. Sales would have increased by 10 percent but for theeffects of acquisitions and divestitures, the company said.

Lockheed's fourth-quarter bottom line included the impactof the aerospace electronics systems divestiture, a debt tenderoffer and a charge associated with an investment.

"We are delighted with the accomplishments that LockheedMartin achieved in 2000," Vance Coffman, chairman and chiefexecutive, said in a prepared statement. "We exceeded allfinancial goals set for 2000, including achieving record ordersand backlog, record free cash flow generation, substantial debtreduction, and the receipt of fair value for ourdivestitures."

For the full year, Lockheed posted a net loss of $1.29 pershare vs. a profit of 99 cents in 1999. Excluding unusualitems, the company earned $1.07 per share for 2000, comparedwith $1.50 in 1999.

The company generated free cash flow of $265 million in thefourth quarter and a record $1.8 billion for the full year.Lockheed said it expects to generate at least $800 million offree cash flow in 2001, and $1.8 billion for 2001 and 2002combined.

Net debt fell by about $3.0 billion in 2000 and backlog atyear-end totaled $56.4 billion, up from $45.9 billion a yearearlier. Lockheed closed the year with $9.96 billion in totallong-term debt, down from $11.48 billion a year earlier.

Sales from Lockheed's systems integration, space systems,aeronautics and global telecommunications segments rose in thefourth quarter, while technology services showed a decline.

The systems integration business posted a 10 percentincrease in sales, with results from the naval electronic andsurveillance systems product line driven by higher volume onland surveillance systems contracts and increased activity onthe new attack submarine program.

Increases in the segment's missiles and air defense productline were due to higher volume on some tactical missileprograms, which helped offset declines in volume on somefire-control and sensor contracts.

The space systems segment saw a 12 percent gain in salesfor the quarter, primarily due to commercial space activities,which outweighed declines in military, civil and classifiedsatellite activities. Still, the group's sales results for thefull year fell 1 percent.

The United Arab Emirates (UAE) F-16 contract helped bolstersales for Lockheed's aeronautics segment in the fourth quarter,offsetting anticipated reductions in scheduled deliveries onother F-16 fighter aircraft programs. The segment's salesdecline for the year was attributed to those anticipateddelivery declines, the company said.

Lockheed said it expects earnings to grow 25 percent to 30 percentfor 2001, up from previous guidance of 20 percent.

The increase reflects lower interest expense, a lowereffective tax rate of 40 percent, and an assumed smallerdecline in retirement plan income than projected previously,the company said.

Lockheed's stock has outperformed the broader market bymore than 50 percent over the last year, as have the stocks ofmany of its defense industry peers. Relative to rivals,Lockheed shares have more closely tracked the Standard & Poor'saerospace and defense index, outperforming by about 10percent.BACK TO TOP

Profits Still Smoking at R.J. Reynolds

Cashing in on another round ofcigarette price increases and expanded shipments, R.J. Reynolds reported improved fourth-quarter results.

The nation's second largest cigarette maker earned $100 million,or 99 cents per share, for the quarter, beating Wall Streetexpectations. In the same time period a year ago, the companyposted 79 cents per share.

In a survey by First Call, analysts estimated that RJR'sfourth-quarter earnings per share would be 96 cents.

Fourth quarter sales rose 3.3 percent to $2.04 billion from$1.98 billion and annual sales were up 8 percent to $8.17 billion.For the year, per share profit was up 17 percent to $3.97 and netincome was up 9 percent at $404 million.

R.J. Reynolds Tobacco Holdings chairman Andrew J. Schindler saidthe company's quarterly earnings were helped by sales growth in thecompany's cigarette brands.

Last month, both RJR and market leader Philip Morris Cos Inc.raised the wholesale price of a pack of cigarettes by 14 cents perpack, a move that will cost smokers even more at the cashregisters. It was the third increase in cigarette prices todistributors in a year.

RJR forecast shipments this year will fall 3 percent to 5percent as cigarette consumption continues to decline.

Despite the wholesale price increases, shipments of thecompany's premium cigarettes rose 2.5 percent and by 2.6 percentfor its discount brands.

RJR's Camel, Winston and Doral brands benefited from advertisingspending to gain market share, Schindler said, its Salem brand lostmarket share.BACK TO TOP

SBC's Profits Rise 5.6 Percent

SBC Communications, theNo. 2 U.S. local telephone company, said today itsfourth-quarter profits rose 5.6 percent as sales of wirelesstelephone and data services surged.

San Antonio, Texas-based SBC said profits, excludingone-time items, rose to $2.0 billion, or 57 cents a share, from$1.9 billion, or 54 cents a share, a year earlier. The resultsmatched Wall Street forecasts compiled by research firm FirstCall/Thomson Financial.

"Consistency is part of the regional Bells. And inuncertain times, consistency is well-received," said TimGhriskey, portfolio manager of the $4 billion Dreyfus Fund.

Including one-time items and accounting changes, SBC'sfourth-quarter net income sank 58 percent to $1.3 billion, or38 cents a share, compared with $3.1 billion, or 90 cents ashare, a year ago. Those results reflect its investments tobuild its data and wireless operations, costs from an employeeearly-retirement program and other items.