WAR GOOD BUSINESS FOR SOME

NEW YORK - Lockheed Martin and Northrop Grumman reported sharp increases in fourth-quarter profit yesterday and raised full-year forecasts, as two of the world's largest defence contractors capitalised on the continuing boom in US military spending.

Lockheed's profit easily beat Wall Street's forecast, helping its shares rise slightly, almost hitting a record.

Northrop narrowly missed analysts' average forecast due to a charge on a radar programme, sending its shares down modestly after notching an all-time high earlier this week.

The companies, with rivals Boeing, General Dynamics and Raytheon, are taking advantage of record US defence spending and more outsourcing of Government technology projects.

Richard Aboulafia, aerospace analyst at Teal Group, said: "If you get the kind of supplementals we've been getting, then that's a lot of money," referring to the billions of dollars being used to pay for operations in Iraq on top of the regular defence budget.

Standard & Poor's Aerospace and Defence index is up about 29 per cent over the past 12 months... http://tinyurl.com/2obsfw [Open in new window]

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