Lockheed Martin Corp. on Tuesday announced net sales of $11.6 billion and net earnings of $1.1 billion for the third quarter of 2016. Net sales increased from $10.1 billion and net earnings from $756 million over the same quarter of 2015
The company noted that on Aug. 16 it completed divestiture of its Information Systems & Global Solutions (IS&GS) business segment, which merged with Leidos Holdings, Inc. That resulted in a net gain of $1.2 billion for Lockheed, which represented the fair value of the shares of Lockheed common stock tendered and retired as part of the offer, plus a special cash payment, less the net book value of the business segment and other adjustments.
Marillyn Hewson, Lockheed president and CEO, said during a Tuesday earnings call that the successful completion of the IS&GS transaction “generated the highest value creation benefits to our stockholders and allows us to focus even more intensely on our remaining core [Defense Department] portfolio.”
Shortly after the divestiture, the National Nuclear Security Administration awarded to Lockheed subsidiary Nevada Site Science Support and Technologies Corp. (NVS3T) the management and operations contract for the Nevada National Security Site. The contract was valued at up to $5 billion over 10 years.
However, less than a week later, it rescinded the new contract after learning that ownership of NVS3T had changed hands to Leidos, saying in a statement that the subsidiary “did not notify the NNSA contracting officer of the change in ownership and control as required by the request for proposal.”
The NNSA is now reconsidering all offers it previously received for the contract competition. Lockheed executives did not discuss cancellation of the M&O contract during the earnings call.