Lockheed Martin (NYSE:LMT) -1% post-market after cutting its full-year earnings forecast due to its purchase of group annuity contracts from Athene Holding (NYSE:ATH) to transfer $4.9B in pension obligations and related plan assets for ~18K U.S. retirees and beneficiaries.
Lockheed says the contracts were purchased using assets from its master retirement trust and no additional funding contribution was required.
As a result of the transaction, Lockheed says it expects to take a $1.7B non-cash settlement charge related to the accelerated recognition of actuarial losses for the affected plans.
Lockheed now sees full-year EPS of $21.95-$22.25, down from previous guidance of $26.70-$27.00 and below $26.90 analyst consensus estimate.
The company maintains guidance for full-year net sales of $67.3B-$68.7B and cash flow from operations at least $8.9B.
Separately, Lockheed says CFO Kenneth Possenriede will retire immediately due to personal reasons, with no further explanation provided; VP and Treasurer John Mollard is appointed acting CFO.
Possenriede became Lockheed’s CFO in February 2019, culminating a more than 30-year career with the company.
Mollard has served as Lockheed’s treasurer since 2016 and has been with the company for nearly four decades.
