Spin-off could could “strengthen competitive posture” as Lockheed Martin as net sales down nine percent
US defence player Lockheed Martin has revealed that it will be conducting a strategic review of its government IT services business.
The firm said it expects the review will result in a spin-off to either its shareholders or a complete sale of the businesses.
“As global security market dynamics shift, this review will strengthen our competitive posture, enabling sustained, profitable growth and positioning Lockheed Martin to deliver value for customers, shareholders and employees,” CEO Marillyn Hewson said of the spin-off plans.
The poorly performing government IT services business, along with the defence firm’s technical services business, will account for around $6 billion (£3.8bn) of Lockheed Martin’s estimated 2015 annual sales revenue and employ 17,000 workers.
The company said that, despite recent customer wins in the US, Europe and Australia, recent shifts in the market mean that the businesses could be better off outside of Lockheed Martin.
“Lockheed Martin will explore whether the businesses can achieve greater growth and create more value for customers and shareholders outside of the corporation,” said the firm.
“The strategic review is expected to result in a spin-off to Lockheed Martin shareholders or sale of these components.”
Lockheed Martin this week reported second quarter 2015 net sales of $11.6 billion (£7.4bn), compared to $11.3 billion (£7.2bn) in the second quarter of 2014. Net earnings in the second quarter of 2015 were $929 million (£594m), compared to $889 million (£569m) in the second quarter of 2014.
Originally published on TechWeekEurope