The automatic federal spending cuts, known as sequestration, went into effect in March and have caused little damage so far, company officials said. But that will change soon, they said.
"We expect to see those impacts grow over the next three quarters," Bruce Tanner, Lockheed's chief financial officer, said Tuesday. "While we're pleased with where we are, we're mindful that sequestration hasn't really hit thus far."
The effect of sequestration has slowly begun to ripple throughout the defense industry. Contractors have complained that the cuts will force layoffs and ramped up efforts to expand into new markets.
For Bethesda, Md.-based Lockheed, the world's largest weapons maker, the early effect is expected to be mostly felt in its information systems and mission systems units. Information technology and training contracts are easier and faster to cut than large weapons systems, such as Lockheed's F-35 fighter jet or a combat ship.
But cuts to those programs could come later, company officials said.
Despite those projections, Lockheed reported that its first-quarter profit jumped nearly 14 percent to $761 million. But sales fell 2 percent to just shy of $11.1 billion.
Lockheed also took a $30 million charge during the quarter related to layoffs. The company trimmed more than 650 employees in its Gaithersburg, Md.-based information systems unit, including about 240 mid-level managers who accepted voluntary layoffs. About 168 of the 650 were Washington area workers, a Lockheed spokeswoman said.
The company has no further "plans for reductions at this point in time," Tanner said.