Lockheed Issues Sikorsky Warning, Investors Appear To Be Unconcerned

Shares of Lockheed Martin Corporation LMT were trading higher by nearly 1 percent Thursday morning despite the company issuing a warning in a regulatory filing relating to its newly acquired Sikorsky Aircraft acquisition. Lockheed Martin acquired the Sikorsky Aircraft business from United Technologies Corporation UTX last year for $9.0 billion. Lockheed Martin cautioned investors in its 10-K that the Sikorsky business "may under-perform relative to our expectations" and that the company's financial results could differ from its expectations. "The integration process is complex, costly and time-consuming and we may not be able to capture anticipated synergies, tax benefits, cost savings, and business opportunities in the time frame anticipated, or at all," Lockheed stated. Lockheed also cited oil and gas trends and the global economic condition in diminishing demand for its products. In addition, the U.S. Department of Defense expressed concerns over consolidation in the defense sector and any changes in policy "could have adverse impacts on our business, including our success in future contract pursuits."