Defense contractors Lockheed Martin and Northrop Grumman have posted solid second-quarter numbers as their services units turned in another impressive quarter.
Both companies have been intent to grow these areas lately to broaden their traditional weapons and systems business and cash in on the growing demand for outsourcing and services work from the public sector.
At Lockheed, the nation’s largest defense firm, revenue from its information systems and global services segment grew 17% to $2.52bn.
Operating profit for the unit was up 19% to $233m. The unit is divided into three areas-global services, information systems and mission solutions. The company said its services line was buoyed by the 2006 acquisition of Pacific Architect and Engineers, while its systems business grew well organically and was boosted by its purchase of Management Systems Designer this February.
Over at Northrop, the information and systems division saw a 15% increase in revenue to $3.24bn, and operating profit was up 6% to $282m. Specifically, sales in the IT and technical services units within this division were up 17% and 28% respectively. The IT business benefited from new contracts such with San Diego County, the Commonwealth of Virginia, and New York City for it’s wireless program. Technical services growth came from Northrop’s Nevada Test Site program.