What Sequester? Big Defense Firms Holding Up OK

Major defense firms, including those with a presence in the Odenton area, appear to be holding up well despite recent budget cuts. 

Companies including Lockheed Martin and Northrop Grumman reported strong earnings in the most recent quarter, suggesting that the effects of sequestration may not hit them as hard as many predicted. 

Bethesda-based Lockheed Martin, which operates a cyber security hub in Annapolis Junction and has other local offices, said its profits rose 10 percent, or $859 million, during the second quarter. 

Northrop Grumman, which has offices in Linthicum and other places in Anne Arundel County, said net earnings rose 2 percent to $488 million during the quarter. 

General Dynamics, also with a local presence, said Wednesday that second quarter net earnings rose slightly to $640 million. 

All three companies have relationships with agencies operating at Fort Meade. 

The Washington Post suggested that these companies have endured the budget cuts due to cost-cutting and staff reductions leading into this year. Northrop Grumman, for instance, laid off some staff at its facilities in Anne Arundel County in February. 

But the Post reported that some of the most dire predictions on the impact of sequestration may not come true. 

“We’re seeing less impact . . . than we had expected to see through the first half of the year,” Bruce Tanner, Lockheed Martin's chief financial officer said, according to the Post. “It’s somewhat hard for us to imagine that the full [anticipated] impact will be realized."

One business website, however, quoted one analyst as saying the impact of sequestration may be realized later. 

"There’s a lot of money that is coming out of the military procurement accounts, but the impact is only trickling down,” defense consultant Loren Thompson told Executivebiz.com.