Defense Contractor 2Q Earnings Up - Some investors worried about a troop pull out

[NNN0LHI]

http://www.forbes.com/feeds/ap/2007/07/24/ap3947346.html

WASHINGTON - Defense contractors Lockheed Martin Corp. and Northrop Grumman Corp. on Tuesday forecast a sunnier second half for 2007 despite some Wall Street concerns that upcoming elections and possible troop withdrawals from Iraq could muddy the defense industry.

Both Bethesda, Md.-based Lockheed and Los Angeles-based Northrop reported growth in second-quarter earnings on Tuesday. But of the two large defense contractors, it was Lockheed whose big profits and rosier guidance pleased investors.

Lockheed's shares rose 3.6 percent after the company reported a 34 percent quarterly gain and increased full-year earnings guidance by 45 cents per share.

Northrop's stock, however, fell 2.3 percent. That came despite a higher-than-expected 7 percent earnings gain and an increase in the lower end of the company's 2007 guidance.

Lockheed, Northrop and other defense contractors have benefited from a boom in defense spending on the wars in Iraq and Afghanistan. Most have posted record earnings and have seen their stock prices soar.

Yet some investors are unsure how the debate on Capitol Hill over troop withdrawals from Iraq could affect the defense industry. And despite the steady growth, many Wall Street analysts remain neutral on defense firms.

[HCE SuiGeneris]

1. War stocks surging. Home owners buried in debt.

GNP numbers are a fabrication. Does anyone know where this economy is really positioned?

I see a huge retraction looming...