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Lockheed Martin Reduces the Number of Workers to Be Furloughed
Posted by: Nitish (IP Logged)
Date: October 16, 2013 05:11PM
The U.S. government shutdown has found a new victim in Lockheed Martin (LMT), the No. 1 U.S. government contractor and the Pentagon’s biggest supplier. The giant has announced on Monday that it will furlough about 2,400 workers due to the government shutdown- about 20% fewer than what the defense contractor had initially planned on. The company based in Bethesda, Maryland, had, on Friday, said that it would furlough 3000 workers but adjusted its initial figure because the Department of Defense recalled most of its civilian employees to work. This was brought immediately into effect after the U.S. Secretary of Defense Chuck Hagel announced that nearly 400,000 civilian Department of Defense workers are important for national security.
The positions which have been furloughed are located mainly in closed government facilities. Lockheed has said that these workers would still be unable to return to work as the government facilities where they work are either closed due to the U.S. government shutdown or have been given stop-work orders on their programs.
Of the 2,400 affected Lockheed workers in the nation’s 27 affected states around 2,100 worked on programs for civilian agencies while the other would work on the military programs. Most of the affected workers, the company said are from Washington.
Another major defense contractor, United Technologies (UTX) has cancelled its plans of furloughing about 2000 workers after the announcement by Hagel. For the record, United Technologies’ shares gained 0.14% to $104.42. It is now leading S&P 500 which is down by 5.1%. The company which makes Black Hawk helicopters and Pratt & Whitney jet engines for the military has though predicted a possible chance of furloughing of workers in the event of a prolonged shutdown.
Another aerospace giant, Boeing (BA) warned of possible furloughs in its Defense, Space and Security unit. The company though is still not clear regarding the process and the timing of furloughing workers. The company says that though it is working towards minimizing the impact of the government shutdown, it expects consequences which might emerge in the coming days. Boeing closed for the day at $116.3 with its shares falling down by 0.57% with a day change of -0.67. The company has also suffered losses in terms of losing out on a precious deal with Japan Airlines to Airbus. This happened in spite of the company promising to improve on its design of the Boeing 777 aircraft.
In spite of the setback that the Lockheed Martin has suffered, the analysts are rating the stock as a good purchase option. The factors working to the company’s advantage are its solid stock performances, growth in its earning per share, a notable return on equity and an overall increase in the net income. Further it is to be noted that the company has been performing well over the past year. Many investors are investing in the company’s shares which helped drive up its shares by a sharp 31.94% over the past year, exceeding that of S&P 500 Index. With the things seeming just right for the aero giant it is a golden opportunity to invest in its shares.
Stocks Discussed: LMT, UTX, BA,